TNAG-2968-FCO40-4247-Future-of-Hong-Kong-British-Consulate-General-inclusion-of--1993 — Page 23

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17 November 1993

Foreign & Commonwealth

Office

RECE

18 NOV 1993

London SWIA 2AH

BY FAX

Telephone: 071-

James Smith-Laittan

British Trade Commission

HONG KONG

Dear James,

INDE,

SG

BRITISH CONSULATE GENERAL/BRITISH CHAMBER OF COMMERCE

1. Francis Cornish's letter of 14 October to Peter Ricketts raised various questions that needed looking at before deciding whether to apply to the Hong Kong Government for a formal lease modification to allow the Chamber of Commerce into the Consulate-General building. We have not come up with all the answers, but I thought you might like to be kept in touch with developments at this end.

2.

As Francis points out, the key factor for the Chamber of Commerce in deciding whether or not to park themselves in the Consulate is likely to be the cost. I therefore asked OED to refine their calculations of likely costs for the Chamber were they to move in. I requested that in looking at the charges for the British Chamber, they should bear in mind the elements going into the British Council package (which is also inching forward - I will brief you separately on this). I was also concerned to find out how much control the Treasury exercise over the 154 arrangements we make. I now attach OED's response to my

questions. The key points are:

a) confirmation that 200 square metres are available in the Consulate-General building for the Chamber;

b) calculating rent on the minimum 6% Treasury discount rate, the cost to the Chamber for occupying this space would come out at £20,520 per annum;

c) Service charge based on typical Hong Kong rate of HK$ 4.5 per month per square foot comes out at a little over £10,000 per annum (iii of Mr Smith's minute goes into detail of what is understood by "service-charge");

d) OED tell me that we do not need to go to the Treasury provided the minimum rent does not fall below the 6% TDR formula index-linked to UK inflation.

3.

So far so good, but OED think there could be a problem with BTC's suggestion that the best arrangement for accommodating the

brit.NAT.JRB

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