Govt Defends HK$20bn Property Purchase Plan

The Labour and Welfare Secretary, Law Chi-kwong, on Thursday defended the government's plan to spend HK$20 billion to buy at least 60 private units to house welfare facilities, saying it’s the fastest way to improve services for the needy.

The rare move unveiled in Financial Secretary Paul Chan's budget address has led to criticism that the use of public money would benefit landlords.

But Law insisted there’s an “imminent” need to increase and improve welfare facilities in densely populated areas.

Law said buying non-residential premises in the private market is a quick solution.

He added that it's not suitable to rent the units, because the facilities are intended for long-term use.

He also dismissed fears that the plan would result in higher property prices.

“We don’t expect that it has a high impact on the market because we are just talking about 130 plus service units, likely will be involving around 60 sites,” he said.

“We’ll be doing it for three years, so each year we are just buying twenty units. That is a very small number, it will definitely not involve any very significant impact on the market,” he added.

Law also brushed aside fears of collusion between government and business, saying there are rules to prevent that.

“We have rules, procurement policies governed by our finance services and treasury bureau, and also rules governed by the ICAC in guiding our procurement policy,” he said.

Law refused to disclose which premises the government intends to buy, only saying they’re located in all 18 districts.

But he said it’s very unlikely that authorities will buy premises currently owned by the Link Reit.

He estimates that the facilities, such as child care and elderly centres, will benefit more than 80,000 people.