URA Will Have To Survive On Loans 'for A Long Time'

The Urban Renewal Authority's managing director on Saturday said the body will have to operate on borrowed money for a long time, as fluctuations in the flat market have affected its income.

Speaking on an RTHK programme, Wai Chi-sing said the unsuccessful tendering of a project in Kwun Tong had also affected its finances.

"In the next few years we have four projects for tendering. According to the current flat market, our revenue from these four projects is expected to be several billion dollars less [than expected]... And in the coming years we have six acquisition projects," he said.

"We won't have enough money, so the URA will need to undergo a loan period. For a long time to come, our capital flows will be in a negative balance and we will need to borrow money to carry on with the projects."

Wai said there is room to review the compensation policy for homeowners affected by redevelopment.

Currently, owners who live in the affected flats are offered the market value of their flats and an ex-gratia allowance, which in total should allow them to buy a seven-year-old flat of a similar size in a similar locality.

Under the allowance policy, the URA chief said around HK$400 or HK$500 billion was used to compensate flat owners affected by the Yau Ma Tei-Mong Kok redevelopment. He said the money could have been used on the mega reclamation project off Lantau to facilitate urban renewal.

"Why do we have to use so much social resources to help people who already own a flat? Many of them didn't even renovate the buildings when they should have done so," he said.

"I think at a suitable time we have to take a serious look at whether there is an alternative compensation mechanism."