17-SEP-1993 17:09
OED CROYDON
081 686 4951
P.03
ugh!
estimate would be approximately £500,000 p.a. which is similar to
ours.
5.
Commercial rents in the Central/Admiralty district can be as high as 50 HK$/sq.ft/mth and so the market rent for the Council's space within the building could be over £3 million per annum. The council probably pay in the order of 20 HK$/sq.ft/mth for approx. 32.000 sq ft in Wanchai £650,000 per annum. Applying the minimum 6% TDR Treasury rule the Council would be expected to contribute £613,608 per annum at current costs and rates of exchange. But the case for discounts for the British Council in Hong Kong (under Treasury's "Technical Guide for Government Departments- Economic Appraisal in Central Government") is not clear and FCO/British Council would need to negotiate/clarify the situation with Treasury. The latter must advise on the rules to be applied to the rentalisation of the cost of the British Council space.
6. You also asked for a comment on possibilities should the British Council exclude themselves from the development. I think it highly unlikely that the present footprint of the council wing would lend itself to any other use without major redesign which in turn would throw into question the validity of the whole of the present design solution. OED's view is that the provision of any significant number of staff accommodation units, and the council's footprint on eight floors will produce 30-40 apartments, is contrary to the current conditions of the PTG. The repercussions would be more onerous than when we faced the possibility of removing a floor from the BC-G and in all probability put us back to square one.
7.
Other issues which you may consider asking Mr from to raise with the British Council include:
a) PES Provision The most straight forward way to get this back on track would be for the PES provision to be nominally split between FCO and BC and for FCO to be charged with the responsibility for getting the premises for co- location in place by the due date (Mr Wootton should confirm if the former is possible at this late stage).
b) Rent and charges forecast In future correspondence with Treasury it would be advisable to include BC's forecasts for their rent and running/maintenance cust charges for comparable alternative premises to allow a proper comparison with future costs in the BC-G. Current figures based on an inferior building and cramped conditions would be misleading.
Alen Dtmill
A.D.Smith
Project Sponsor
OED
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