TNAG-2961-FCO40-4240-Future-of-Hong-Kong-British-Consulate-General-building-incl-1993 — Page 39

ALE

Mr Wootton

RFD

CONFIDENTIAL ́

Reference

MKD 406/2

RECEIVE

06 AUG 1993

162

INDE

667

HONG KONG CONSULATE GENERAL:

1.

BRITISH COUNCIL

We spoke about your minute of 23 July. I now attach a copy of the letter which Mr Magor sent to the British Council on 27 July (we did not have any opportunity to comment before its despatch; once the British Council respond, Mr Magor has undertaken to discuss the next steps with HKD, RFD and OED).

2.

Before meeting to discuss the way forward as you suggest, I would be grateful if OED would provide a forecast of ground rent and running costs in the new building (Mr Smith is already working on this).

3.

My own preference would be to find the underpinning we need to demonstrate that the British Council should use the building rent free, since this is the understanding which has all along been the basis for their involvement in the project.

4. I would therefore be grateful if copy addressees could make one more effort to identify papers that would help us to demonstrate that the Treasury were aware that the original PES bid was made specifically in terms of a co-located project or as a joint FCO/British Council bid led by the FCO.

5.

I have had a further look through my own files. There are various references to a PES bid based on co-location, but nothing definitive in terms of a communication with the Treasury. (OED what about 1989 papers? We do not hold any in HKD). I attach the first two pages of a minute from Mr Morris (HKD) to PS/Lord Caithness dated 28 August 1991. You will see that paragraph 7 refers to an OED minute of 22 August in terms which suggest that this minute might shed some light. Grateful if OED could look into this. It might also be worth OED looking at internal bbackground papers to Mr Bertram's submission of 15 November 1991. This recommended proceeding with colocation and stated immediately following this recommendation (paragraph 10) that

"funding for a co-located project is already included in the FCO's PES capital baseline. The Council will not therefore be required to contribute a capital sum (nor pay rent) except to any extent that the total cost of the project exceeded that funding (in which case the Council might be required to contribte their pro-rata "share" of the excess). The

6.8.CONGENdbj

CODE 18-77

CONFIDENTIAL