TNAG-2962-FCO40-4241-Future-of-Hong-Kong-British-Consulate-General-building-incl-1993 — Page 61

explained in para 7 of the letter of 7 June 1993. The summary

below of the build and leasing options serves to demonstrate conclusively that building is still much the more economic

solution:

Build new offices (all Consulate

General and British Council) and

7 UK staff flats..

Lease new offices (Consulate

..NPV £32.8m

Appendix A

General and British Council) and

7 UK staff flats..

NPV £77.7m

Appendix B

4. We have carried out a further risk analysis of the project

and conclude that those identified in para 8 of my letter of 7

June will continue to be the main risks.

5.

Our Ministers have accepted our proposed course of action to proceed with the project at a total estimate cost within

£29.0 million. I should be grateful for your agreement to

proceed as soon as possible. Time is important in order to

keep to programme for occupation by 1 July 1996.

6. Para 7 of your letter under reference asked us to explore the scope for phasing the development and whether that would have a favourable bearing on the economics/costs of the

project.

The works have already been phased to bring forward

the demolition, site formation and foundation contracts prior

to completion of the detailed design of the superstructure. This has allowed us to speed up the programme and thereby take advantage of the present competitive market in the construction industry in Hong Kong. scope for phasing the project without delaying the eventual

completion and risking escalating construction costs. It is

an important political objective for HMG that the

There is little further

It.marr.NATjoyce