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LCQ18: Debris removal charges collected by outsourced PRH property management services agents
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     Following is a question by the Hon Leung Kwok-hung and a written reply by the Secretary for Transport and Housing, Ms Eva Cheng, in the Legislative Council today (May 30):

Question:

     I have received complaints one after another from residents of Yan On Estate in Ma On Shan, Hung Hom Estate (Phase 2) in Kowloon City and those who are moving into the new phase of Shek Kip Mei Estate pointing out that because the payments made by the Housing Department (HD) to the outsourced property management services contractors (the contractors) of the estates are so low that HD has allowed the contractors to employ every means without legal basis and illegally to collect from the residents who are moving into the estates an excessive charge called "debris removal charge" (DRC), and HD just turns a blind eye to it.  The residents have pointed out that the contractors insist on collecting DRC before they assist applicants for public rental housing (PRH) in making move-in arrangements and signing tenancy agreements.  Some residents have even relayed to me that their renovation companies have already collected from them charges for disposal of wastes from renovation works under the Waste Disposal Ordinance (Cap. 354) and the aforesaid contractors are not companies authorized by the Government to collect charges.  They are very angry that some residents are forced to pay double charges and that the Government has turned a blind eye to unauthorized persons collecting excessive charges.  In this connection, will the Government inform this Council:

(a) of the total numbers of PRH flats in Yan On Estate in Ma On Shan, Hung Hom Estate (Phase 2) in Kowloon City and Shek Kip Mei Estate which will be ready for occupation soon, the estimated numbers of households moving in, and the total amounts of DRC that the contractors have collected or plan to collect, and list the information according to the table below;

Name      Debris   DRC      DRC      Total    Total
of        removal  amounts  amounts  numbers  amounts     
public    charge   for      for      of        
housing   (DRC)    medium   large    households
estate    amounts  flats    flats
          for
          small
          flats
 
Yan On
Estate
@ @ @ @
Hung Hom
Estate
(Phase 2) @ @ @ @ @

Shek Kip
Mei Estate
(New
phrase
which will
be ready
for
occupation
in 2012)
@ @ @ @
(b) whether the aforesaid contractors are authorized under the laws of Hong Kong to collect DRC from each household; if so, of the legislation under which they are authorized; if not, whether HD has turned a blind eye to the contractors collecting without legal basis and illegally an excessive DRC from residents who are moving into the estates;

(c) whether cleaning services for estate buildings are included in the contracts signed between HD and the contractors; if so, why the contractors are allowed to collect DRC excessively; whether HD will immediately terminate the contracts signed with the contractors concerned and assist the residents in demanding refunds from the contractors; whether it will assess if the prices of the contracts signed between HD and the contractors for cleaning services in housing estates are too low, and whether HD will immediately adjust upward the prices of such contracts;

(d) whether HD or its contractors have any statutory power under the existing housing ordinances to penalize residents for disposing wastes from renovation works casually or illegally; if so, of the penalties and the number of households penalized for this in the past five years; if not, whether the Government will amend the housing ordinances immediately;

(e) whether the Government requires the contractors to collect DRC before they assist PRH applicants in making move-in arrangements and signing the tenancy agreements; if so, of the legislation under which such arrangement has been made; if not, whether such contractors have the statutory power not to assist residents who refuse to pay DRC in making move-in arrangements and signing the tenancy agreements, and the legislation under which such power is exercised;

(f) whether authorization was given under the housing ordinances for printing HD's emblem on the receipts given to residents after they pay DRC; if so, of the ordinance; if not, whether it knows if such receipts are issued by the contractors, and the legislation under which the contractors are authorized to issue such receipts; why such contractors do not use HD's official receipts;

(g) when residents moved into Yan On Estate in Ma On Shan and Hung Hom Estate (Phase 2) in Kowloon City and the HD contractors collected DRC from them, whether such contractors had established billing accounts for disposal of construction waste under the Waste Disposal (Charges for Disposal of Construction Waste) Regulation (Cap. 354N); if so, of the respective dates on which they obtained approval to establish such accounts; if not, of the ordinance under which such contractors collected DRC from the residents; and

(h) given that some residents have settled the charges for disposal of wastes from renovation works with their renovation companies under the Waste Disposal Ordinance but they are forced to pay DRC to the contractors at the same time, whether HD will assist such residents in demanding refunds from the contractors; if it will, when it will do so?

Reply:

President,

     It is quite usual that public rental housing (PRH) tenants will carry out decoration works for their flats during their intake to new PRH estates.  According to prevailing arrangement, the user-to-pay principle will be adopted in disposing the decoration debris produced as a result of this work.

      In order to effectively dispose decoration debris, and avoid the accumulation of decoration debris and garbage in common areas such as corridors and lift lobbies causing fire risks and obstruction, the Hong Kong Housing Authority (HA) assigns the Property Services Agents (PSA) managing outsourced PRH estates to dispose the decoration debris in one go during intake.  This arrangement allows decoration contractors employed by the PRH tenants to dump the decoration debris at a designated debris dumping point in the estate as set up by the PSA without having to transport the decoration debris to the government waste disposal facilities on their own.  According to the property management contract entered into between the HA and the PSA after tendering, the PSA is permitted to charge new tenants the Debris Removal Charges (DRC).  These are set according to the flat size.  The obligation of the DRC payment and its amount is clearly set out in the Decoration Handbook, Intake Notification Letter and Notes on Intake provided by the Housing Department (HD) to prospective tenants prior to intake.  The PSA would also brief prospective tenants on the matter pertaining to collection of DRC during intake briefing sessions.

     My reply to the eight-part question is as follows:

(a) The rates of DRC is determined according to factors such as the total number of flats in the estate, flat size, travel distance between the estate and the nearest government waste disposal facilities, and operating expenses of the contractor, etc.  For Yan On Estate in Ma On Shan, Hung Hom Estate Phase 2 in Kowloon City and Shek Kip Mei Estate Phases 2 and 5, the rates of DRC charged by the relevant PSAs with the breakdown by flat size are as follows:

Estate DRC for   DRC for   DRC for   DRC for   Total
name   1-Person/ 2-Person/ 1-Bedroom 2-Bedroom number   
       2-Person  3-Person  Flat      Flat      of
       Flat      Flat                          house-
                                               hold

Yan On   $157     $243      $366      $460     2 587
Estate

Hung     $162     $258      $365      $479     1 204
Hom
Estate
Phase 2

Shek     $156     $258      $362      $495     4 054
Kip
Mei
Estate
Phases
2 & 5

(b) As mentioned above, the PSA would charge PRH tenants the DRC in accordance with the flat size, in order to assist in handling and delivering the debris dumped at the estate's debris dumping point to the government waste disposal facilities in one go according to the property management contract entered into between the HA and the PSA.

(c) According to the property management contract entered into between the HA and the PSA, the PSA is responsible for the estate's daily cleansing services.  However, as mentioned above, during intake of new PRH estates, PRH tenants in general will carry out decoration works for their flats using their own contractors and a considerable quantity of decoration debris would be produced.  As such, the property management contract allows the PSA to charge new PRH tenants the DRC in accordance with the flat size, in order to handle the debris concerned in one go.

     On the other hand, for tenants who declare that no fitting-out works will be carried out, the PSA would conduct flat inspection within three months after the execution of tenancy agreement and arrange for the refund of the DRC within one month after confirmation.  If tenants who are eligible for the exemption at the time of intake but did not apply for exemption during intake and paid the DRC, the PSA would arrange for the refund upon receipt of the exemption application as soon as possible.

     In fact, the clauses under the property services contract have clearly specified the requirement of PSA for carrying out the cleansing services and the monthly remuneration that PSA could receive, etc.  As such, PSA should be well aware of the contract terms in bidding the price for the tender.  Hence, there is no cause for unauthorized charging of DRC due to low contract price.  Furthermore, HD has a sound and fair tender assessment system to ensure that the contract price is reasonable and that the PSA concerned has the capability to deliver the services required under the contract.

(d) According to prevailing requirement, decoration debris arising from fitting-out works has to be disposed of at the designated debris dumping point in the estate as set up by the PSA.  If tenants are found dumping the decoration debris improperly in the estate, the HD will handle the cases in accordance with the guidelines in the Estate Management Marking Scheme (Marking Scheme).  The HD does not have statistics of committing such misdeed of improper disposal of decoration debris under the Marking Scheme.

(e) While assisting tenants to move in and sign the tenancy agreement is a tenancy management matter handled by the PSA on behalf of the HA; the charging of relevant DRC by the PSA is an estate management matter.  The two duties are of different nature and would be handled separately by the PSA.  HD would remind the staff of the PSAs that if new tenants during intake of new estates did not pay the DRC as stated above, they should handle the matter flexibly so as to avoid delaying the moving-in of the tenants.

(f) As mentioned above, the PSA could only charge new PRH tenants the DRC in accordance with the flat size according to the property management contract entered into between the HA and the PSA.  Upon receipt of DRC, relevant PSAs would issue receipts to tenants.

(g) The PSA or its employed cleansing contractor has to open a billing account in accordance with the requirement of the Waste Disposal (Charges for Disposal of Construction Waste) Regulation to pay for the charges of using government waste disposal facilities.

(h) If decoration contractors employed by new PRH tenants deliver and dispose of the decoration debris to government waste disposal facilities in accordance with the relevant statutory requirement on their own, and can provide relevant supporting document, the PSA would arrange for the refund upon receipt of the refund applications from the tenants as soon as possible.

Ends/Wednesday, May 30, 2012
Issued at HKT 13:40

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