22 August 1991
John Morris
Hong Kong Department
Page
HONG KONG : FUTURE CONSULATE GENERAL
Reference...............
KA I ZU21/
1.
You invited my comments on the point raised in Mr Holmes' minute of 19 August regarding British Council's potential rent liability as co-occupants of the Consulate General building which we hope to construct on the site of Colvin House.
2. As you know well the Colvin House solution envisages the execution of a premium free Grant of land by HKG to HMG, which Ministers accepted in principle some time ago. In anticipation of that conclusion, Treasury approval of the project "perse" and in light of the agreed objective of co- location, the construction cost of the building, including the Council's requirements, was successfully bid for in last year's PES round. We have no reason to expect that this will not be endorsed at next month's Bilateral.
3.
Assuming the Colvin House project goes forward as we hope and Treasury provide the funds 'as bid',
'as bid', OED see no reason why rent would be chargeable to the Council.
4. However, if it transpired that the capital cost of meeting the Council's requirements within the co-located project were not so funded and FCO were required to meet some of the cost from its normal allocation then a liability to rent would arise. In such circumstances I assume we would charge a commercial rent with a minimum derived from the current Treasury discount rate.
5. Even though we expect the Colvin Site to be made available at no premium, a ground rent will be payable (as yet unquantified). We would apportion that, together with other outgoings such as maintenance, common part utilities and services, rates or taxes between the Consulate General and co-occupants such as the Council, FCO Procurement Unit etc. The Council would also be responsible for its own internal fitting out, maintenance and utility costs.
6. OED will be minuting separately on OED's policy towards subletting and the two specific cases referred to in para 4 of Mr Holmes' minute.
Joan tornan
f? D Savage
Manager Area One
Room 416 AP
760 8133
Cc: PR Holmes, CRD
Miss Studham, RMD
CODE 18-77
PJDSA.697
No comments yet.
Private notes are available after approval.