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The following is issued on behalf of the Housing Authority:

Shek Kip Mei Factory Estate will be cleared by the Housing Authority. Affected tenants will be given an Ex-gratia Allowance (EGA) and three months' rent-free in other Housing Authority factory estates, or a Cash Lump Sum in lieu.

The site of the factory estate is now required for public housing purposes and clearance is required prior to demolition and redevelopment in mid-2001. Although factory tenants affected by clearance have no legal rights to compensation, it is the Housing Authority's policy to provide assistance so that tenants can relocate their business if they so wish, or to cover some of the losses of extinguishment of their business.

Tenants of Shek Kip Mei Factory Estate will be given at least 18 months notice and rent increases (if any) will be frozen pending redevelopment. The EGA and the Cash Lump Sum in lieu for tenants holding rights of asignment are calculated as follows:

Ex-gratia Allowance Cash Lump Sum

Floor ($) per unit ($) per unit

G 93,456-186,912 9,200

1 75,677-151,354 9,200

2 74,704-149,407 9,200

3-8 73,935-147,870 9,200

Shek Kip Mei Factory Estate was built in 1977 and comprises one 9-storey block accommodating 390 factory units with standard size of 24 square metres. Currently, 373 units are occupied by a total of 233 tenants. In case all the affected tenants choose to have Cash Lump Sum in lieu of a rent-free period, the total EGA payable would be $50.7 million and the Cash Lump Sum up to $3.4 million, making a total of $54.1 million.

According to a spokesman, Housing Authority factory buildings were built to assist in clearance of Government land in the 1960s and 1970s, and are now rather old and fall short of modern standards. Sites needed for other purposes have been redeveloped from time to time.

END/Thursday, 30 September, 1999

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