The Urban Renewal Authority's resources will be running out in as soon as five years if the authority doesn't change its current policies, said the managing director Donald Choi Wun-hing, after recording zero deals last financial year amid global economic downturns.
Speaking at a Legislative Council meeting on Monday, Choi said the URA has recorded a net loss for the third consecutive year in the financial year ending in March and will spend a lot on the promised projects, which he described as unsustainable.
Choi, who proposed to review URA’s acquisition policy of seven-year-old flat in the same locality, said the authority must change its current measures. Otherwise, its resources will be used up in five to 10 years.
Some lawmakers also urged URA to review the “Seven-year rule” that has been in place since 2001 with an aim to speed up the redevelopment progress, as the policy will keep the authority under financial pressure amid a sluggish real estate market.
Secretary for Development Bernadette Linn Hon-ho agreed to relax the rule as it would hinder acquisitions by private developers, adding that the bureau will review acquisition plans and present recommendations within the next year.
URA recorded no successful tender in the previous financial year, with the Kai Tak Road / Sa Po Road Development project finally withdrawn, severely hurting the authority’s cash flow, said the chairman Chow Chung-kong at the same LegCo meeting.
Chow attributed it to the global economic downturns, which affected the recovery of the local economy and property market in the city and weakened developers’ bidding interests.
But the URA chair reiterated that the authority’s fiscal condition remains stable.
Lawmaker Kitson Yang Wing-kit appealed to the URA to change its partnership model with the developers, including engaging the private sector once the acquisition starts.
Choi responded that the suggestion is good but he added that URA needs to consider how to choose suitable developers in the early stage and the builders need to mull over the acquisition time and potential risks.
In other news, lawmaker Chan Han-pan advised the government to add incentives to residents in three sites in the Northern Metropolis to accelerate the “flat-for-flat” scheme.
Linn said the bureau will review the FFF measure, adding that she doesn’t rule out the possibility of implementing the scheme in some urban projects.
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