With only the most narrow of majorities backing the yes campaign in last September's referendum, the Welsh Office is treading cautiously.
The political sensitivity of the exercise means that ministers are anxious not to make its cost an easy target for the many opponents of the venture.
Negotiations will continue up to the 11th hour and the presumption must be that Cardiff, the capital, with its superior links with the east, will win. Yes, says a Welsh Office source, with the following caveat: "Cardiff, but not at any price".
Swansea, the alternative, offers savings and the ability to involve other centres, including Wrexham, perhaps with video link-ups. Around pounds 17m is available for the capital costs of the project, and ministers are determined to get value for money.
It is inconceivable that such a discussion would be taking place in Scotland. Although the Scottish parliament site is a controversial issue, the cost is not nearly as contentious because its establishment has the consensus on its side. Wales lacks a similar confidence in devolution and Mr Davies knows it.
A seasoned professional, he has been one of the unexpected successes of the Cabinet. From the left of the party and sympathetic to unfashionable causes such as republicanism, "Red Ron" was viewed last year as a potential casualty when Mr Blair constructed his first Cabinet.
Instead the Prime Minister gave him the job he had done in opposition, with a ministerial team which includes the energetic Peter Hain. The decision has paid off, with only a couple of incidents - notably when the MP Llew Smith claimed he had been muzzled - hitting the English headlines. Although the political scene in Wales is lively and will, with the advent of the assembly, become more so, it has impinged little on the rest of the nation. The conflicts between the Welsh Office and Whitehall under the Tories are a distant memory.