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Speech by Director of Housing at Hong Kong Housing Authority regular open meeting

The following is issued on behalf of the Hong Kong Housing Authority:

     Following is an English translation of the speech by the Director of Housing, Mr Stanley Ying, at the Hong Kong Housing Authority regular open meeting yesterday (July 18):

Chairman, Members and colleagues,

     At the Annual Special Open Meeting of the Hong Kong Housing Authority (HA) held last month, many Members shared their views on the work of the HA.  Today, I will respond to Members' speeches.  I will also review our major tasks in the past and look ahead into the future.

     A lot of Members have talked about the Long Term Housing Strategy (LTHS).  Undoubtedly, the most important development on housing policy in the recent period is the formulation of the LTHS initiated by the Government.  It will be the first LTHS to be formulated by the Government since 1998.

     An extensive and in-depth discussion process had been initiated by the Government with a view to gauging public's views.  First of all, the LTHS Steering Committee was established in September 2012.  Subsequently, the LTHS Steering Committee held 11 meetings and conducted a three-month public consultation.  During the consultation period, it attended more than 50 open meetings and forums.  It submitted a consultation report to the Government in this February.  Meanwhile, the Legislative Council Panel on Housing set up a subcommittee and held 11 meetings.  The Public Accounts Committee (PAC) also discussed the two Audit Reports by the Audit Commission and published the PAC Reports Number 61 and Number 62 in January and July this year respectively.  These discussions and documents touch upon various aspects of our housing strategy and policies.  We are studying these views in details in order to formulate the LTHS.  The Government plans to release the LTHS by the end of this year.

     The LTHS is the Government's blueprint on housing affairs.  It will set out the Government's overall policy direction in various aspects.  Individual departments and authorities concerned will follow-up on the implementation details within these policy frameworks.  Other than the relevant Government departments, the HA will definitely be a major player.

     Members talked about issues such as the Well-off Tenants Policies, the Quota and Points System (QPS), and the under-occupation policy etc.  These are exactly the policy areas which the LTHS Steering Committee has suggested the Government and the HA to review.  The Housing Department, being the executive arm of the HA, is responsible for formulating feasible proposals for the HA to consider.  We have been making preparation on this front and have commenced our discussion with the Subsidised Housing Committee (SHC).

     In the past discussions, one of the topics which the public was most concerned about is the waiting time for public rental housing (PRH).  During my process of understanding this topic, I find that some members of the community do not seem to have a full grasp of the relevant information.

     Firstly, it seems that some members of the public are unaware of the fact that the PRH Waiting List (WL) consists of two categories under the prevailing policy of the HA.  Prior to 2005, we only had one WL.  Different types of applicants were all waiting according to the order that they were registered on the WL.  In light of the huge increase in the number of non-elderly one-person applications and with an aim to ensure that priority would be accorded to the housing needs of family and elderly applicants, the HA introduced the QPS in 2005.  Since then, non-elderly one-person applicants had to apply for PRH through the QPS, under which the annual allocation quota for non-elderly one-person applicants is set at 8 per cent of the number of PRH flats to be allocated to WL applicants, subject to a ceiling of 2 000 flats.  Points are assigned to applicants on the basis of three factors: the age of the applicants at the time of submitting their PRH applications; whether the applicants are existing PRH tenants; and the waiting time of the applicants.  Therefore, the average waiting time (AWT) target of around three years is only applicable to general applicants (i.e. family and elderly applicants), but not non-elderly one-person applicants under the QPS.  However, some young people seemed to have the impression that upon registration under the QPS, they will be allocated a PRH flat in around three yearsˇ¦ time.  This misunderstanding may be one of the reasons for the surge in the number of QPS applications in recent years.

     There are also some criticisms and misunderstanding about the AWT target of around three years.  One of the criticisms is that we should explain to the public about the criteria and the methodology for the calculation of the AWT.

     We accept this criticism and have uploaded onto the HA's website the definition and the quarterly data of the AWT in order to increase transparency.  I would like to take this opportunity to clearly explain the definition and calculation methodology of the AWT target of around three years.  The HA has been adopting the same methodology in calculating and in presenting the AWT.  Waiting time refers to the time taken between registration for PRH and the first flat offer, excluding any frozen period during the application period (e.g. when the applicant has not yet fulfilled the residence requirement; the applicant has requested to put his application on hold pending arrival of family members for family reunion; the applicant is imprisoned, etc).  The AWT refers to the average of the waiting time of those general applicants who were housed to PRH in the past 12 months.  It is the HA's policy to give three offers of PRH flats to applicants.  The applicants can accept the first offer, or wait for the second or the third offers.  It is a matter of personal decision of each applicant and is beyond the control of the HA.  Depending on whether the applicant accepts the first, second or the third offer, it could result in three different calculations of waiting time.  Hence, we believe that the waiting time should only be counted up to the first flat offer, but not the time when the applicant was housed.  It is not an entirely accurate description to say that the HA has made the commitment to house applicants in three years' time.  If we are to articulate our target in a few words, it would be more precise to say "to allocate flat in three years on average" or "to give flat offers in three years on average".

     There is another misunderstanding in the community that the HA is offering undesirable flats, such as flats where there had been murder cases, to PRH applicants as first offers on purpose in order to maintain the AWT at around three years.  I must stress that this is not the case.  Such offer, if refused by the applicant, will not be counted as a valid offer and the waiting time will continue to be counted, according to our practice.  Therefore, the allocation of such a flat to an applicant will not advance the time of first flat offer and will not shorten the AWT.

     A further misunderstanding is that we choose not to disclose the fact that the waiting time has been on the increase in recent years.  In fact, we have been publishing the relevant figures.  The AWT has gradually decreased from 6.6 years to 2.9 years from end-March 1998 to end-June 2002.  Subsequently, given the sharp increase of PRH applications, the AWT increased from 2.0 years in end-March 2011 to 3.0 years in March 2014.  As at March 2014, there were about 121 900 general applications and about 126 200 applications under the QPS.  As the supply of land for PRH development is tight, it has resulted in a mounting challenge for us to maintain the three-year AWT target.  We will strive to maintain the three-year AWT target, despite the possibility of occasional departure from the target.  We will continue to closely monitor the number of PRH applications and, where possible, adjust the development programmes for PRH and Home Ownership Scheme (HOS) to maintain the target.

     In order to maintain the target of allocating PRH flats at about three years, we have, on the one hand, strived to achieve the production target of 200 000 PRH flats in 10 years as set out in the Policy Address; on the other hand, we are obliged to ensure the rational use of existing PRH resources.  We will continue to implement the Well-off Tenants Policies to combat PRH abuse and to implement the under-occupation policy.  We will also closely monitor the situation to prevent incidents of double housing benefits.

     Firstly, on tackling PRH abuse, our frontline staff will, by way of routine management work and biennial flat inspections, detect any possible PRH abuse, such as non-occupation; false declaration on income; using PRH for commercial activities or storage; and illegal activities such as, gambling and possession of drugs, etc.  We will adopt stringent measures to combat PRH abuse.  To this end, we have redeployed 30 experienced estate staff to the Central Team to enhance our efforts in tackling PRH abuse.  We have also launched a series of publicity and educational programmes through various channels to foster public awareness of the need to safeguard the rational use of PRH resources.  We also encourage members of the public to report PRH abuse cases to us.

     In accordance with the under-occupation policy, households with living areas exceeding the relevant standards are required to move to another flat of smaller size in order to recover larger flats for allocation to PRH applicants and overcrowded tenants.

     Tenants of some under-occupied households may not be able to move to other flats owing to their age or disabilities.  In setting out the implementation details of the under-occupation policy, the HA has adopted an approach with a view to striking an appropriate balance between optimising the use of PRH resources and catering for the needs of under-occupied households.  According to the revised under-occupation measures in place since last October, households with disabled members or elderly members aged 70 or above are excluded from the under-occupation list.  Families with elderly members aged between 60 and 69 will continue to be placed at the end of the under-occupation transfer list.  As we have some 7 600 prioritised under-occupation cases to handle, under-occupied families with elderly members aged between 60 and 69 in the next few years are not required to transfer.

     As for the Well-off Tenants Policies, about 20 000 households were required to pay extra rent or market rent as at end-March 2014.  According to the public consultation conducted by the LTHS Steering Committee, the majority of respondents supported the Well-off Tenants Policies, and even asked for more stringent measures.  However, some respondents felt that the policy were driving the adult children of tenants to move out of PRH, and is contrary to the Government's policy to encourage young people to take care of their elderly family members.  The LTHS Steering Committee considered that the HA should take all these factors into consideration in reviewing the Well-off Tenants Policies.  As I said earlier, we will map out some options for discussion with the SHC of the HA.

     Optimising the use of PRH resources is not just about kicking out people from PRH, or moving tenants from larger to smaller flats.  Providing bigger flats for families in need is another aspect of optimising the use of PRH resources.  As such, we have in place various transfer schemes.  In 2013/14, around 2 000 households were transferred to more spacious flats under the Territory-wide Overcrowding Relief Transfer Exercise and the Living Space Improvement Transfer Scheme.  The number of overcrowded households reduced from some 18 000 to around 3 100 at present, representing 0.43 per cent of the PRH households since the introduction of the scheme in 2001.  The number of households with less than 7 square metres internal floor area per person has dropped by more than 40 per cent, from about 34 000 before the introduction of the Living Space Improvement Transfer Scheme in 2006 to around 20 300 as at end-March 2014.

     To optimise the use of PRH resources, we cannot stick to the established criteria for assessing PRH applications only and ignore the needs of individual persons who require compassionate consideration.  The HA has put in place the Compassionate Rehousing Scheme to enable earliest possible allocation of PRH flats to individuals or families with pressing housing needs on social or medical grounds.  Under the scheme, the Social Welfare Department (SWD) will ascertain and recommend cases with pressing housing needs and with social or medical grounds to the Housing Department.  On receipt of such recommendations, we will make arrangements for allocation as soon as practicable.

     To ensure consistency in assessment, the SWD has drawn up working guidelines to set out objective factors for considerations by its frontline staff as well as authorised non-government agencies when handling compassionate rehousing applications.  Both the SWD and the non-government agencies authorised by the SWD will follow the same procedures and guidelines.  However, as each case is unique, the SWD and the relevant agencies will make professional judgment based on the facts of the cases.

     In some cases, applicants are required to provide documents to prove their marital status.  Where necessary, frontline social workers of the SWD or authorised agencies will assist applicants to apply for replacement of lost divorce documents or other supporting documents.  Under special circumstances where the SWD is satisfied that the divorce is genuine, we will accept the applicant's statutory declaration in lieu of the legal divorce documents as recommended by SWD on a discretionary basis.

     Some recent media reports may lead to some misunderstanding.  I would like to take this opportunity to clarify.  Firstly, we have not set quota for "Compassionate Rehousing" and we will allocate PRH flats to applicants upon recommendation by the SWD.  Secondly, the Housing Department has no record of rejecting any recommendation by the SWD for Compassionate Rehousing cases.  We will continue to pay attention to the implementation of the compassionate rehousing policy.

     So far I have focused on PRH.  Let me now turn to the HOS.  The Government announced the resumption of the HOS in 2011.  With an aim to address the home ownership needs of those with White Form status before the completion of the first batch of newly built HOS flats, the HA introduced an interim scheme last year, allowing 5 000 White Form buyers to purchase flats with premium not yet paid on our HOS Secondary Market or flats under the Hong Kong Housing Society's Flat-for-Sale Scheme Secondary Market.

     The HA issued approval letters to the first and second batches of 2 500 successful applicants in end-May and end-December last year respectively, allowing them to apply for a Certificate of Eligibility to Purchase with a validity period of six months.  As at end-June 2014, 3 983 of the 5 000 successful applicants have applied for the Certificate of Eligibility to Purchase, 1 939 of whom have purchased flats on the Secondary Market.

     All Certificates of Eligibility to Purchase, including renewed ones, will expire early next year.  We will review the effectiveness of the scheme by gauging the overall response of the applicants with reference also to the market conditions before deciding the next step.

     As regards the newly-built HOS flats, our current target is to produce about 8 000 HOS flats per year.

     We are making good progress in constructing the first batch of about 2 200 new HOS flats.  They are expected to be completed in 2016/17.  These flats are located in Sha Tin, Tsuen Wan, Kwai Tsing and Yuen Long.  Preparatory work for the pre-sale of these HOS flats at the end of this year is in progress.

     Some Members recommended leveraging on the private sector's capacity to supplement the Government's efforts in developing subsidised housing.  The Private Sector Participation Scheme was introduced in 1978 and was terminated after the cessation of the production of HOS flats, following the Government's repositioning of housing policy in 2002.  Experience shows that although the scheme had the merit of tapping into private sector resources to help provide about 100 000 subsidised housing flats in total, there were great variances in terms of quality of works.

     During the public consultation on the LTHS, while there are views supporting more private sector participation in the development of subsidised housing, there are also views suggesting that private sector participation should only be pursued if the quality and costs of subsidised housing provided through private sector participation are comparable to, or more competitive than, those provided by the HA.  We are carefully assessing the pros and cons of different forms of private sector participation under the current circumstances and with reference to experience, and will submit proposal for consideration by the Government and the HA.

     To build 200 000 PRH flats and 80 000 HOS flats within ten years, we need land.  We are still working hard to take forward one project after another to ensure we secure sufficient land.

     Identifying land is not the work of the HA, nor does it fall under the Transport and Housing Bureau.  But I understand that whether a piece of land can be used to build PRH or HOS, when we are allowed to start the works and eventually how many flats we can build are not in the hands of the Government's planning and lands authorities only.  Every piece of land must go through district consultation and even statutory procedures before its planning, land use and development intensity can be changed.  The HA can only commence the works after completion of all these procedures.  We have been working closely with relevant Government departments so as to complete these procedures and consultation in the soonest possible way.  However, our experience shows that these consultations and procedures sometimes take a long time to complete and often leads to reduction in the number of flats that can be built on the land as compared with planning parameters.  These may also lead to late completion beyond our plan.

     I would like to explain the planning and design works of the projects in details, hoping that local communities can be more understanding in considering our projects.

     To start with, building new PRH and HOS in the urban district would inevitably increase the building density of that district.  It may also impact on the views enjoyed by individual residents.  But I would like to emphasise that we are in great need of new PRH flats in the Urban District as many PRH applicants need such flats.

     Our analysis indicates that as at June 2013, 16 per cent of general applicants had yet to receive the first flat offer after having waited for three years.  Among them, 88 per cent chose PRH flats in the Urban District or the Extended Urban District.  If we cannot continuously build PRH flats in the Urban District and the Extended Urban District, it would be more difficult for us to shorten the waiting time of these applicants.

     As I have just said, buildings in these districts would almost inevitably increase the population and traffic volume of those districts, and may even affect the views enjoyed by existing residents.  We cannot change these facts but we will endeavor to reduce the negative impact in all aspects to the minimum.

     Firstly, the Development Bureau and the Planning Department would conduct preliminary reviews and consult relevant Government Bureaux and Departments before allocating a piece of land to the HA.  The HA will then conduct technical studies for each potential public housing site to ascertain whether it is suitable and feasible to develop public housing there.  Generally speaking, we will conduct even up to more than 25 studies.

     Simply put, among these 25 studies, we will basically conduct 15 studies for every site.  These studies include Site Potential Study, Architectural Feasibility Study, Traffic and Transport Impact Assessment, Drainage Impact Assessment, Sewerage Impact Assessment, Noise Impact Assessment, Air Quality Assessment, Water Supply and Utilities Impact Assessment, Geological and Geotechnical Appraisal, Ground Investigation, Microclimate Studies, Air Ventilation Assessment, Tree Survey and Impact Assessment, Visual Appraisal, and Land Surveying.

     Depending on individual site conditions, another 10 specific studies may be required including Planning and Engineering Studies, Land Use Assessment, Land Contamination Assessment, Quantitative Risk and Potentially Hazardous Installations Assessment, Site Formation Assessment, Natural Terrain Hazard Study, Existing Slope Features Assessment, Ecological Assessment and Heritage Impact Assessment.

     Recommendations arising from these technical studies will help us formulate the planning brief and scheme design of the public housing development and ensure that the public housing development would be compatible with the development of the district concerned.  We must comply with the requirements of the Hong Kong Planning Standards and Guidelines and co-operate with relevant Government Bureaux and Departments on requirements of planning parameters.  We will also consult local communities and District Councils to ensure adequate provision of local, community and retail facilities.

     We can see from the above that every public housing site has gone through detailed procedures and a series of technical studies.

     As every public housing site is precious, we will consider all suitable sites, regardless of their size, for public housing development under the principle of optimal utilisation of land resources.  We will construct public housing in the most cost-effective and sustainable manner.  Many of the sites allocated to the HA are yet to be cleared and formed, or without adequate provision of infrastructure.  Some are intrinsically difficult in nature, such as having complex geotechnical conditions, requiring re-diversion of existing s utilities, etc.  Despite all these constraints, we will endeavor to turn these sites into public housing projects to provide homes to more citizens.

     Although it takes time to conduct district consultation and it will increase the complexity of our work and bring about uncertainty, we will still insist on carrying out adequate consultation.  We truly want to understand the views and demands of the community, and hope that our housing projects could be an integral part of the community in the future.

     Some Members raised the idea of increasing the supply of PRH through the redevelopment of aged PRH estates.  Some Members also suggested us to set a clearer timetable for redevelopment.  I would like to give a detailed response here.

     As redevelopment of aged estates will affect numerous households, we must have a clear policy and explain our policy to the residents in a transparent manner.

     The White Paper on LTHS published in 1998 had clearly stated the redevelopment strategy.  The White Paper explained that any large-scale redevelopment programme would inevitably exert a heavy drain on resources.  Therefore, redevelopment would only be carried out as required, having regard to the actual conditions of individual estates, i.e. when an estate was structurally unsafe or became uneconomic to maintain in a continued manner.  The need for demolition of an individual PRH estate or block should depend on their circumstances.

     Afterwards, it was promulgated in the 2011-12 Policy Address that we will "explore ways to appropriately increase the densities and plot ratios of PRH projects without compromising the living environment".  The HA formulated the Refined Policy on Redevelopment of Aged Public Rental Housing Estates at the end of 2011 (the 2011 Refined Policy) to clearly set the direction for future redevelopment of estates.

     According to the 2011 Refined Policy, in determining whether to redevelop an individual estate, we will take into account four principles, viz. the structural conditions of buildings; the cost-effectiveness of repair proposals; the availability of suitable rehousing resources in the vicinity of the estates to be redeveloped; and the build-back potential upon redevelopment.

     Availability of rehousing resources is an important factor.  In accordance with the 2011 Refined Policy, we will follow the general practice to improve and preserve the buildings if there are no sufficient and suitable rehousing resources.  Obviously, this policy can take care of the needs of residents as it will bring greater inconvenience to the residents if we carry out redevelopment without suitable rehousing resources.  However, availability of rehousing resources alone cannot determine the redevelopment plan as two more factors, viz the structural safety of the estates and the cost-effectiveness of repair proposals and the build-back potential upon redevelopment have to be examined.

     In order to consider a redevelopment project, we have to conduct a series of detailed technical studies, including the development restrictions under the statutory plans; development constraints of the sites; local context; environmental, traffic, air ventilation and visual impacts of the redevelopment on the surrounding area; infrastructure capacity, etc.  We also have to liaise with relevant departments to sort out the associated ancillary facilities such as, community, social welfare, transport and educational facilities, etc., and take into account requests from the locals and the relevant Departments and District Councils.  As you can see, the redevelopment of aged estates is not an easy task and it involves very complicated work.

     If we decide to go ahead with the redevelopment of an individual estate, we must provide relevant information to the tenants as soon as possible.  We will carry out the work according to our established procedures, which include giving tenants adequate notice before clearance, providing tenants with information on redevelopment arrangements as well as offering appropriate financial and other assistance.  Generally speaking, formal announcement for redevelopment will be made three years (i.e. 36 months) before the clearance operation.  Therefore, tenants can be assured that there will be no sudden announcement of redevelopment.  I would like to reiterate that we place great emphasis on providing information to tenants in a timely manner.  We have carried out a major redevelopment project recently, i.e. the redevelopment of the Pak Tin Estate.  My colleagues have spent quite some time and efforts to design a pamphlet to provide information to the tenants in simple language and graphics.  The results are quite good.

     In the past few months, tenants of some estates expressed concerns as to whether their estates would be redeveloped.  Some people are worried about the redevelopment while the others look forward to it.  To give tenants a better understanding of the HA's redevelopment policy and implementation details, we have prepared pamphlets and sent our staff to the Estate Management Advisory Committee of these estates to explain to tenants that there will be no sudden implementation of redevelopment.  I wish to reiterate that we will consider whether to redevelop individual estates, taking into account the individual circumstances, in accordance with the 2011 Refined Policy but will not carry out massive redevelopment.

     As we will not redevelop every single aged PRH estates in the near future, we must make every effort in the maintenance of these estates.  In fact, because of the advancement of technology in the field of maintenance, even buildings of 40 or 50 years old could still be structurally safe, and can provide satisfying accommodation for many families.

     In order to provide a decent and safe living environment for PRH tenants, we carry out the Comprehensive Structural Investigation Programme for aged PRH estates to ensure their structural safety.  We have introduced the Total Maintenance Scheme to provide comprehensive repair services for tenants.  We have also introduced the Responsive In-flat Maintenance Service whereby front-line staff members can respond to individual tenants' requests for repair services, making it quicker to rectify the building defects at an early stage.  We have rolled out Total Maintenance Scheme in 99 estates and we have completed the inspection and maintenance works for 72 estates.  In addition, Responsive In-flat Maintenance Service has also been implemented in 211 estates.

     Apart from maintenance of the interior of the flats, we have also put in place Estate Improvement Programme for those aged estates which are found to be structurally safe, economically sustainable, and not being the target for redevelopment within the next 15 years or so.  The programme will update the estate amenities and other facilities.  As of today, we have finished improvement works in six estates, while the works for another seven estates are still in progress as scheduled.

     We understand that maintenance works and Estate Improvement Programme will inevitably bring about certain degree of inconvenience to the tenants.  We have commissioned an independent consultant earlier to carry out a study to gauge the tenants' level of satisfaction towards these services.  The results show that most of the tenants welcome these schemes and we will continue our efforts on this front.

     We also highly value community participation. To encourage PRH tenants to actively participate in estate management work, the HD has implemented the Estate Management Advisory Committee Scheme in PRH estates since 1995.  Currently, more than 140 such committees have been formed in various estates.

     Through these Estate Management Advisory Committees, we can collect tenants' feedback on estate management matters face-to-face.  With first-hand information, the HA will be able to formulate estate management policies that cater for their needs.  The Estate Management Advisory Committees also have a role to play in assessing the performance of cleansing and security contractors for the enhancement of property management services.

     Since 2009, the Estate Management Advisory Committees invite different non-governmental organisations to organise partnering functions each year in order to strengthen cohesion and sense of belonging among PRH tenants.

     We also organise a large-scale seminar every two years to provide a platform for members of the Estate Management Advisory Committees across the territory to exchange views with our colleagues from the Estate Management Division.  The most recent seminar was held in this March and was attended by some 700 Estate Management Advisory Committee representatives.

     However, to mobilise the community to strive for the common goal of sustainable development, we cannot rely solely on the participation of the Estate Management Advisory Committees.  We need active participation from all tenants.  The Estate Improvement Programme in Kwai Shing West Estate is a successful case in point.  We conducted Community Engagement Workshops to encourage participation of the locals during the planning stage of the programme so that the construction of the common area and corridor and the artistic design could meet as far as possible the needs of the tenants.  During the numerous workshops and briefing sessions, the stakeholders of the community, comprising the tenants, the Estate Management Advisory Committees, local District Council members, schools and non-governmental organisations from the neighbourhood, gave valuable views to our project teams in drawing up a comprehensive design that can cater for the tenants' needs.

     Apart from ensuring the sustainable development of the community, we also strive to enhance greening measures in existing estates.  Last year, we conducted landscape improvement works in 18 PRH estates to revamp or improve their green features.  Furthermore, we have developed two thematic gardens, one at Lee On Estate in Ma On Shan and the other one at Shun On Estate in Kwun Tong.  A total of about 1 600 trees, 550 000 shrubs and 60 000 annuals were planted to enhance the landscape of PRH estates.

     We have made reference to the Building Environmental Assessment Method Plus (BEAM Plus), to make more efficient use of energy and resources.  Kwai Shing West Estate was selected for a pilot trial, and was found to be fulfilling the requirements for existing buildings under BEAM Plus.  The estate has achieved a "Provisional Platinum" rating in June 2014, and is the first existing PRH estate in Hong Kong to receive this rating.

     Kwai Shing West Estate is also the first existing PRH estate that was awarded ISO 50001 Energy Management System Certification.  With the successful experience gained in the ISO 50001 Certification in Kwai Shing West Estate, we are preparing to obtain ISO 50001 Certification for all PRH estates in the coming two years in a bid to support the Hong Kong Government's campaign of enhancing energy efficiency and reducing carbon emission.

     Lift service is probably one of the facilities in the common areas of PRH estates that consume the most electricity and, at the same time, is much needed by the tenants.  With the continuous advancement of lift technology, we are now modernising the lifts in various estates.  Among the estates, Fu Shan Estate, built some 35 years ago, had its lift modernisation works completed over a year ago.  This does not only provide more comfortable, reliable and safe lift service to the tenants, but also achieved a reduction of almost 20 per cent of total carbon emission in 2012/13 and was awarded a "Carbon Reduction Label" issued by the Hong Kong Quality Assurance Agency last month.

     While carrying out lift modernisation works to replace the lifts of old designs, we know that there are few aged estates that do not have lifts at all.  For the convenience of our tenants, we have made Lift Addition Programme a rolling programme.  For Stage One of the Programme, we completed the installation of all 70 lifts, six escalators and 18 footbridges.  We launched Stage Two of the Lift Addition Programme in early 2013 and the construction works are scheduled for commencement in the latter half of this year.

     Several Members have suggested that the HA should make full use of the non-domestic plot ratio and increase the floor area of its shopping centres and other ancillary facilities as far as practicable.  Other Members also suggest converting non-domestic plot ratio to domestic plot ratio.  Actually, we have endeavored to convert non-domestic plot ratio to domestic plot ratio as far as permitted under the planning brief, and we will also consider the addition of carparking spaces, welfare or commercial facilities in our estates.  However, the actual provision would depend on the circumstances of the individual projects.

     According to our experience, owing to the size and topographical constraints of some sites, the whole design, lay-out and living environment of the development may become very unsatisfactory, if more non-domestic facilities are added on top of the construction of residential units and public space.  At the same time, we also need to address the views of the local communities, as sometimes the local communities want us to reduce the size of the buildings as far as possible, and especially to avoid blocking the air ventilation in pedestrian area as well as to reduce the additional traffic, etc.  We should give full consideration to these views and try to accommodate them.  In addition, we have to consider the additional costs and time required for non-domestic facilities.  We cannot neglect these factors in view of the HA's financial constraints and our wish to build PRH and HOS as soon as possible.

     Finally, we must assess whether a particular type of non-domestic facility will meet the needs of the local community, so as to avoid any facility becomes a "white elephant" in the future.  To this end, I especially want to thank the Commercial Properties Committee for its years of effort on the continuous improvement of the utilisation rate of various existing commercial facilities.

     In the future, we will continue to maximise the use of land, taking into account the actual circumstances of individual projects.

     Finally, I would like to talk about the resources issue.  I have earlier talked about the land issue and I will now discuss financial and human resources of the Department.  Members have expressed concerns on the sustainability of the HA's finances once we factor in the public housing construction target of 280 000 flats to be delivered in next 10 years.

     As we can see from the budgets and forecasts of the HA for the financial years 2013/14 to 2017/18, the cash and investment balance of the HA would gradually decrease in the coming few years due to the increase in public housing production.  If this trend continues, the HA would experience financial difficulties in the long term.  The Government is aware of this problem.  The Financial Secretary stated in his 2014 Budget Speech that the HA should have sufficient funding, and he expects us to consolidate revenue increases and cost savings and embark on a discussion with the Government on the long term financial arrangement.  We have started discussion with the Government on this issue.

     Today, we cannot as yet work out a rather accurate long term projection of the HA's financial situation, and this is in part because there are some policy issues that still need to be worked on and decided on.  For instance, if we introduce some form of private sector participation, it might impact on the construction cost of the HA.  Secondly, as stated by the Financial Secretary, the HA has to consolidate revenue increases and cost savings so as to better utilise the public resources.  As construction expenditure is the most significant component of our expenditure, we have to adopt "Lean Design and Construction" for new works projects, such as further structural optimisation and adoption of modular flat design, in order to continue enhancing cost-effectiveness.  We will also continue to review the management of PRH and operation of the non-domestic facilities, working on cost saving and revenue enhancement.  While this issue of the financial situation is an important issue, we still have a bit of time to follow up on those issues which might have financial implications, to examine cost-saving and revenue-enhancing initiatives and then explore the possible options to tackle the long term financial issue.

     As for manpower resources of this department, this is a matter closest to our hearts and of immediate concern to colleagues and myself.  Since taking up this post several months ago, I have met with some 30 unions of the department and have made my best attempt to meet with colleagues from various sections.  During our conversations, colleagues would almost invariably raise the manpower issue.  As Members are aware, the number of staff in the department had undergone some changes over the past decade or so.  Following the surge in housing production, we now need to ensure that there is adequate manpower for housing construction, estate management and central support.  This is an important responsibility of the management team of the department.  We will tackle the issue with a two-pronged approach.  Firstly, we need to increase our workforce.  Over the past three years, we have already much increased our manpower.  However, given the rise in workload in future, we will need to continue to monitor the changes in demand for manpower, apply for additional staffing as necessary, and engage more supplementary workforce to help out.  On the other hand, in order to ensure the prudent use of human resources, we will also review our work processes including reviewing the prioritisation and importance of the tasks in order to decide which tasks we could do less or even cease to do.  We also need to look into process re-engineering to reduce low value adding or even negative value adding work processes, or look into redeployment to minimise any mismatches, etc.  When implementing this two-pronged approach, we hope to achieve both top-down commitments as well as bottom-up participation, and we will also need the support from all Members.  For instance, to support us in simplifying procedure when considering new or existing tasks, so that we can utilise our resources in accordance with our priority consciously.

     Finally, I would like to summarise the challenges we now face.  At present, the number of applicants for PRH hits its record high.  At the same time, the HA has to cope with increasing expenditure and possible financial difficulties arising from the large-scale public housing construction in the next decade.  Undoubtedly, we also need to tackle the problem of land supply.

     To overcome these difficulties, we must be equipped with an outstanding team.  While I have only worked with my colleagues in the Housing Department for several months, I am very confident that we have a professional team and we are wholeheartedly dedicated to building and managing our estates.  I look forward to carrying out our jobs with our colleagues under Members' guidance and support.  Thank you.

Ends/Saturday, July 19, 2014
Issued at HKT 01:47


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