TNAG-2961-FCO40-4240-Future-of-Hong-Kong-British-Consulate-General-building-incl-1993 — Page 28

Mr Paul

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SB

Reference

(A)

BRITISH CONSULATE GENERAL AND BRITISH COUNCIL

1.

Derek Savage,

I discussed your minute to me of 20 June with

OED. He said he was unclear as to how Tom Buchanan got the impression that the British Council "would" be expected to pay a full commercial rent for their share of the Colvin House premises. OED had only ever said that they were reserving their position on the question of

rent.

2. The background was that our PES bid for funds to construct the Consulate-General had been based on the principle of co-location and as such contained an element specifically to provide funding for the British Council's part of the building (ie a supplement to the British Council element of the FCO vote).

3.

If funds were ultimately provided on this basis, the FCO would not consider charging a commercial rental to the British Council, although they would be expected to pay a proportion of any ground rent (not expected to be onerous). If however the Treasury failed to allocate funds specifically for the British Council and required the FCO to find the balance out of FCO capital funds, then this would represent an allocation which the FCO could otherwise have an alternative use for and it was therefore reasonable to consider charging a rent to the Council in compensation. (But this was in any case more likely to be a rental at the usual Treasury discounted rate than a "full commercial rent"). Savage emphasised that in mentioning a rent at all, OED were simply reserving their position. They were not in a position to give the kind of guarantees which the British Council were seeking until the Treasury confirmed that the funding was secured on the basis of the bid.,

4. Savage had explained this to British Council officials at a meeting last week which he had called to introduce them to Gordon Johnston (Grade 5 responsible for negotiating the architect's brief for the Consulate-General). Ed Pugh and Stephen Macanally had said that the Council had so far been preoccupied with the uncertainty over the rent and their future status (see below) and had not concentrated on their part of the brief. But they agreed, in the light of the pressing need to get on with the project, to review their requirements and attend a further meeting (date to be confirmed) to discuss the matter with OED. Macanally is to be the Council's contact person on the brief.

5.

Savage also referred to the question of whether registration under the Companies Ordinance would give the British Council a status which was incompatible with the

TELAGC

TG

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