URA postpones some tenders

Eunice Lam

The Urban Renewal Authority has postponed the tender schedules of some of its redevelopment projects and avoided making high-cost acquisitions that affect returns, URA managing director Wai Chi-sing said.

In his blog yesterday, Wai said such measures would "inevitably affect the URA's cash flow situation."

"Taking into account the current market, the URA expects the willingness of developers making bids would not return active in the short term, therefore, we have already postponed the tender schedules of some redevelopment projects," he said.

Wai added that in order to maintain the sustainability of urban renewal in the city, the URA had previously issued bonds totaling HK$12 billion, and signed a HK$13 billion five-year term and revolving syndicated loan facilities, to supplement cash flow for ongoing acquisitions for its redevelopment projects.

Together with the Nga Tsin Wai Road/Carpenter Road development project in Kowloon City, for which acquisition commenced last April, the URA will have to acquire flats for a total of five redevelopment projects that have been approved by the government in the next few years, with an estimated acquisition cost of about HK$30 billion, Wai said.

"If the URA only considers the wishes of the residents involved in the commenced redevelopment projects, and makes decisions involving high acquisition costs, any future changes in market conditions that would bring to a significant reduction in the return," he said.

"This would directly affect the pace and scale of other redevelopment projects that the URA could undertake."

Wai said the URA has adopted a "dynamic" management strategy, to adjust the pace of acquisition based on the project's scale, the complexity of the acquisition work and construction difficulty.