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LCQ6: Operation of Urban Renewal Authority

     Following is a question by the Hon Chan Han-pan and a reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (January 28):


     At its inception in 2001, the Urban Renewal Authority (URA) was mainly tasked with urban renewal and building rehabilitation.  It operates on a self-financing basis.  In recent years, the Government has entrusted URA with more and more tasks, including the launch of the "Operation Building Bright" in 2012 to provide subsidies and technical support to the owners of dilapidated private buildings, as well as taking over all the building rehabilitation work from the Hong Kong Housing Society (HKHS) within a short period of time.  Moreover, in the Policy Address recently delivered by him, the Chief Executive has proposed that URA be invited to assist in developing subsidised-sale flats.  However, URA predicted last year that it would experience budgetary constraints.  Some members of the public worry that URA may not have sufficient resources and manpower to cope with the additional work. In this connection, will the Government inform this Council:

(1) whether it will make further capital injections into URA to ensure that URA has sufficient funds to operate and undertake the additional work; if it will, of the details; if not, the reasons for that;

(2) whether it has assessed if the continued expansion of URA's scope of work by the Government will make URA focus only on certain work while neglecting other work, thus slowing down the pace of redevelopment of old buildings and old districts; and what measures are in place to ensure the main work of URA will not be affected; and

(3) whether it knows if URA has estimated the additional manpower and expenditure needed for taking over the building rehabilitation work from HKHS in order to ensure that the quality of service can be maintained; if URA has, of the details; if not, the reasons for that?



     The Urban Renewal Authority (URA) was established under the Urban Renewal Authority Ordinance in 2001 to replace the Land Development Corporation to undertake and facilitate urban renewal.  Redevelopment aside, the purposes of URA also include improving the conditions and physical appearance of the built environment through promoting the maintenance and improvement of individual buildings, as well as preserving buildings and sites of historical, cultural or architectural interest.

     With the broad consensus built after two years' public engagement, in February 2011, the Government announced the 2011 Urban Renewal Strategy (URS), identifying "Rehabilitation" and "Redevelopment" as the core businesses of URA.  Proper building maintenance can extend the useful life span of buildings and reduce the need for redevelopment.  Seen in this perspective of urban renewal, "Rehabilitation" and "Redevelopment" are indeed interrelated and complementary to each other.

     On "Rehabilitation", in the early years since its establishment, URA piloted a building rehabilitation scheme in 2003.  The Building Rehabilitation Materials Incentive Scheme and the Building Rehabilitation Loan Scheme were officially launched in 2004.

     To achieve the dual objectives of improving building safety and creating job opportunities, the Government launched in 2009 the one-off Operation Building Bright (OBB) initiative to provide assistance for the maintenance and repair of buildings aged 30 years or above.  Apart from the funding support approved by the Legislative Council, URA and the Hong Kong Housing Society (HKHS) also shared part of the costs and provided one-stop technical assistance to buildings participating in OBB.

     In 2011, with a view to enhancing building safety measures and further facilitating the owners of old buildings, URA and HKHS consolidated their five different subsidy and loan schemes targeting owners of old buildings and jointly launched the Integrated Building Maintenance Assistance Scheme (IBMAS).

     In 2012, the Buildings Department implemented the Mandatory Building Inspection Scheme and the Mandatory Window Inspection Scheme to tackle the long-standing problem of building neglect in Hong Kong.  To help needy owners fulfil the requirements of the schemes, URA and HKHS launched the Mandatory Building Inspection Subsidy Scheme (MBISS) to provide selected eligible building owners in their respective rehabilitation service areas (RSAs) subsidy for the cost of their first building inspection.

     The above mentioned are URA's work on the rehabilitation front, and are one of the core businesses of URA.

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

(1) According to the audited accounts of URA as at 31 March 2014, URA was financially healthy with an accumulated surplus of approximately $13.9 billion and a net asset value of approximately $23.9 billion.  While a deficit of about $2.3 billion was recorded in 2013-14, URA has projected that its financial position will improve in 2014-15 and there is no need for capital injection by the Government.  This is because a number of URA projects (including the Kwun Tong Town Centre Development Areas 2 and 3 as well as two projects at Hai Tan Street) were successfully tendered in mid to late 2014 while invitation for tender for another Fuk Wing Street project is underway.

     As regards the Hon Chan Han-pan's concern over the proposal for URA to explore participation in the supply of subsidised sale flats in the Chief Executive's Policy Address just announced, we understand that URA is currently studying the subject.  We will discuss with URA again when it has come up with concrete proposals.

(2) As I mentioned above, under the 2011 URS, URA is tasked to adopt "Rehabilitation" and "Redevelopment" as its core businesses.  On "Rehabilitation", URA has participated in OBB launched by the Government, and implemented IBMAS and MBISS in collaboration with HKHS.  On "Redevelopment", since 2009-10, URA has commenced 10 URA-initiated redevelopment projects, 10 projects under the Demand-led Redevelopment Project Pilot Scheme (including two which were terminated as they failed to attain the threshold of owners holding 80 per cent or more of the property interests accepting URA's acquisition offers), and two projects under the Pilot Scheme for the Redevelopment of Industrial Buildings (including one which was not proceeded further by URA as all the owners were prepared to redevelop the site by themselves).  When compared with the 21 URA-initiated projects commenced in the period between 2004-05 and 2008-09, it shows that URA has not slowed down on the redevelopment of old buildings despite taking on more rehabilitation work.

(3) The 2011 URS stipulates that "Rehabilitation" is one of the two core businesses of URA.  To enable URA to provide rehabilitation assistance to the public in a more focused and user-friendly manner, URA and HKHS have subsequently reached agreement that URA will take over the work of HKHS under IBMAS by phase.  Starting from April 2013, URA has extended its RSAs from the original Central and Western district, Wan Chai district and part of Kowloon to include the entire Kowloon urban areas, Tsuen Wan district and Kwai Tsing district.  URA will further extend its RSAs to cover the whole territory in July 2015, completely taking over the work of HKHS under the Scheme.

     In the past few years, URA has been recruiting additional manpower to cope with its rehabilitation work.  With the gradual completion of rehabilitation projects under OBB, the manpower of URA deployed for OBB is expected to be gradually released to support the other rehabilitation initiatives of URA in the next two to three years.  URA will, through staff re-deployment and the use of information technology, such as a dedicated portal for rehabilitation, carry out rehabilitation work, as well as disseminate relevant information on building rehabilitation and conduct public education in a more cost-effective manner.

Ends/Wednesday, January 28, 2015
Issued at HKT 15:01


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