Mr Lau, ladies and gentlemen,

I am delighted to be asked to speak to you today. As one of the government officials responsible for ensuring that the Chief Executive's flat production target will be met, I welcome this opportunity to share with you my thoughts on the relationship between the private sector and the Government as far as housing supply is concerned.

A couple of weeks ago, I mentioned on another occasion what the Government would do about land supply. Specifically, in the longer term, the Government has committed to developing 10 strategic growth areas, including the remaining part of Central and Wan Chai Reclamation, Green Island and Southeast Kowloon etc. It is estimated that these strategic growth areas will provide sufficient land to build 270,000 housing units capable of accommodating 720,000 people between 2006 and 2011 and these plans will be more firmed up after the relevant studies are completed.

In the more immediate future, the first 5-year Land Disposal Programme (LDP), which I announced in July this year, will continue to be the basis on which housing land will be made available. We have already set up a Land Disposal Committee within the Government to ensure that we will dispose of sufficient land to meet market demand in a timely manner. The Committee will also monitor the progress of implementation of the Land Disposal Programme, which will be rolled forward each year. We are now taking actions to prepare for the second 5-year LDP for announcement early next year.

This is all very well, but let us not forget the role played by the private sector. Government sells housing sites. We approve land exchanges. We process lease modifications. We grant land for specific housing developments. These efforts will bear fruit only if they are matched by a positive response from the private sector.

On the Government's side, we have already taken actions to institute a culture change among our staff. Our intention is to further promote a sense of partnership between the Government, developers and the professions related to housing development. All our key officials have been told that their role is to approve, rather to reject proposals, and in cases where projects cannot be approved, they should point out clearly the reasons and help to find solutions for them. We are also fully aware that from time to time, grievances have been expressed by the private sector about the complexities, requirements and over-control of the Government's development approval process. We have not taken these grievances lightly. Let me say categorically that we see no place for red-tape in the development approval process. It creates unnecessary work, both for professionals and the Government. It slows things down. It overloads my colleagues who have other things to do. So the less red-tape there is, the better.

We should also go one step further by being more responsive, more flexible, more efficient, more transparent, and after all by offering more certainty in processing housing development proposals.

As you will recall, a package of initiatives to streamline various procedures for processing housing development proposals was unveiled after the Chief Executive's Policy Address in October. This is the outcome of my discussions with your representatives and those of concerned parties in the trade as well as suggestions put forward by my departments.

I do not intend to go into the details of the package now, but it suffices to say that the package covers four areas where improvements will be made. These are planning approval, land approval, environmental approval and building approval.

The package of initiatives has been generally well received by the people in the trade. However, there are understandably some doubts about whether we will make the new system work. One common view is that front-line officers in concerned Departments may not see eye to eye with the top echelons of the Administration, whose determination is beyond doubt.

Let me assure you that our determination is not confined to a small circle in the Government. We make it our task to spread the message to all civil servants involved in the system. In this regard, the Financial Secretary, together with all the policy secretaries and heads of departments concerned, has recently briefed all directorate officers involved on the importance of facilitating housing development projects. We rely on them to explain the same to their colleagues, particularly those front-line officers who deal with the users of the system on a day-to-day basis, and make them responsible for delivery of the outcome.

We do not under-estimate the difficulty in re-orienting the mind set of some officers involved in the system. This may take some time and proper training. We leave it to individual departments to determine how best to cater for the training needs of their staff.

At the end of the day, the feedback from you, as users of the system, is useful as it helps us to look at the system from a different perspective. We may not agree with you on each and every of your views, but you have my assurance that we are receptive to new ideas and views and do not let go any of them easily. We are also prepared to keep the system under continuous review, and so will welcome any additional suggestions from you as we progress.

To conclude, we count on the private sector to join hands with us to meet our flat production target, and will continue to work with the private sector as partners in this regard. Let me say, once again and categorically, that the Government is determined to implement the housing programme. It is a long term objective, and there is no plan whatsoever to change it.