Select Committee on Treasury Minutes of Evidence


Annex A

COMPARISON WITH PREVIOUS BID

  1.  Exchequer Partnership put forward two options when submitting their bid in the summer of 1996.

  2.  The first, known as Scheme A, provided for the demolition and rebuilding of the core of the west (St James's Park) end of GOGGS to provide offices for the Treasury, with the remainder of the building also used as offices.

  3.  The second, known as Scheme B (EP's preferred option) provided for the demolition and rebuilding of the core of the west (St James's Park) end of GOGGS to provide offices for the Treasury, with new residential and hotel provision in those parts not taken by the Treasury.

  4.  The proposal put forward in 1999 (developed from proposals first put forward in the previous summer) differed from these in three key aspects:

    —  it represented a refurbishment rather than a more extensive redevelopment;

    —  it did not rely on a private sector tenant occupying the east end of the building as hotel accommodation or on the development of a suite of 24 apartments at the western end overlooking St James' Park, with an underground car park; and

    —  it did not involve any decant to a third building in Vauxhall.

  5.  In other words, any assessment of the costs of the proposals does not compare like with like. The 1996 schemes were for a redevelopment, not a refurbishment and the bid price was subsidised by the value extracted from the development of the hotel and flats (but it is not possible to calculate what the value of the subsidies might have been).

  6.  Nonetheless, our best estimate of the comparison of the capital cost was:

  
£m
May 1999 bid
90.218
1996 Scheme A
94.900
1996 Scheme B
96.457


at 31 March 1999 prices, updated by a Gardiner and Theobald Management Services inflation estimate, as appropriate.

  7.  We also sought to compare service costs. This too was difficult, since there are no widely accepted indices of inflation in this area. However, even without allowing for inflation, the 1999 bid of £91.47 per square metre compared with one of £98.51 per square metre in 1996.

  8.  Finally, we need to compare the savings we achieved through not decanting to Camelford House in Vauxhall. This would have cost £15.85 million to fit out for the Treasury, with no prospect that any of the money could have been recouped after our return to Whitehall. In contrast, the decant within the main Treasury building and to our second building in Victoria to facilitate the works will only cost around £300,000.


 
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