CODE 18-77
Mr Smith PPU, OED
Reference.......
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HKD 406/2
RECE
07 J. 1993
HONG KONG: CONSULATE GENERAL
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1. Thank you for sending your draft letter to the Treasury, seeking agreement to proceed on the above project, for comments. The proposal makes clear that developing the Colvin House site, provided free of charge, is more cost effective than renting other property as one would expect.
Options
2.
As you are seeking agreement to proceed on the Colvin site I believe it would be worth amplifying the conclusions of the various other non-Colvin House site options listed in
paragraph 3 as only the rent option has been fully costed in the proposal. A summary table might be useful drawing on previous work.
3. For the Colvin House site it seems likely that HMT will want to see the costs of options for a smaller building plus renting referred to in paragraph 6a. Paragraphs 6a and 6b imply that some functions may need not be included in new CG building. As unutilised office space cannot be sub-let there is likely to be a presumption towards building the minimum necessary office space unless this can be shown not to be cost effective.
4. Before considering where savings could be made it may be useful to state more explicitly in paragraph 6 what has been agreed as HMG's post 1997 needs and the resulting floor space requirements. If some requirements have not yet been fully agreed it might be worth stating that requirements are the maximum likely to needed (if that is the case).
5. As the identified cost is within the supply estimates it might be better to show further potential savings as options to be considered in the event of cost over-run. This could be discussed with paragraphs on the risk of cost overrun.
Risks
6. On risk 8a) you could legitimately argue that construction costs rise at faster than average inflation as they have done so historically. Therefore the fixed price tender obtained is particularly good value for money. When are the tender prices valid until? Similarly you could also
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