TNAG-2960-FCO40-4239-Future-of-Hong-Kong-British-Consulate-General-building-incl-1993 — Page 56

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CONFIDENTIAL

KN3631/96.

20 JUN 1990

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PRIME MINISTER

23 APR 1993

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Future British Consulate-General in Hong Kong

During your meeting with the Governor of Hong Kong in February 1989, you agreed that it was important for future confidence in Hong Kong that Britain should be seen to acquire a substantial building on a prestigious site for its official representation. You recognised that this would inevitably be expensive but that the

costs would have to be borne.

2. We have conducted extensive and robust negotiations with the Hong Kong Government, with the aim of achieving our agreed objectives. We have now made substantial

progress.

3. As you know, HMG own no property in Hong Kong. had to acquire land and construct a suitable building at full market prices, the cost would be well over £40 million at current prices.

If we

4.

Accordingly we have pressed Hong Kong to give us markedly preferential terms, in the form of a free grant

of land. A few months' ago, it would have been very difficult to persuade Exco to accept this. The Governor now recommends that we should take advantage of the

CONFIDENTIAL