TNAG-2960-FCO40-4239-Future-of-Hong-Kong-British-Consulate-General-building-incl-1993 — Page 77

hum7.4cg

Mr Hum

Chief Clerk

RESTRICTED

FROM:

PF Ricketts

Hong Kong Department

DATE:

7 April 1993

CC:

PS/PUS

Sir J Coles

Mr Muir

Mr Alston

Head:

OED

RFD

CRD

HONG KONG:

NEW CONSULATE-GENERAL: BRITISH

COUNCIL CONTRIBUTION

1. I have one comment on Mr Bertram's submission of 31 March: with apologies for not chipping-in earlier.

2. I am left with a feeling that we are letting the British Council off rather lightly in terms of a contribution to making up the expected cost overrun.

3. As Mr Bertram points out in para 8 of his submission, they are consuming about a third of the total floor area of the building. I recognise that, at the time of the relevant PES settlement, the British Council understood that they would not be making either a capital or a rental contribution to the cost of the building. Their reaction when approached for help was therefore predictably that they had no funds available to take on extra unexpected costs and would look for ways of reducing their requirements. Equally of course, OED had not allocated funds to take on these extra unexpected costs and would have to meet them from savings elsewhere in their capital programme. The British Council's offer to reduce their requirements is only useful to us if it reduces the overall cost of the building. If we are able to bring the OED Procurement Unit into the building, that will save us rental from 1996. But it may be possible to do that on the basis of reduced requirements in the light of the current MRS study of the future Consulate-General. Unless the British Council were to reduce their requirements enough to allow another whole floor of the building to be chopped out it would not reduce our capital costs: and I understand that there are other disadvantages including architectural problems with omitting further complete floors.

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