Just $80m paid out for piling scandal

PUBLISHED : Friday, 26 September, 2003, 12:00am
UPDATED : Friday, 26 September, 2003, 12:00am

Construction company Zen Pacific has agreed to pay the Housing Authority $80 million to compensate for defective piling works were found in a Home Ownership Scheme project in Sha Tin.

The scandal cost the authority about $600 million.

The authority said yesterday that any sums related to the project recovered by Zen Pacific from its sub-contractors or consultants would also be handed over.

The authority announced two days ago that the contractor had made a payment over the piling scam. But it did not reveal the amount of the settlement until yesterday.

Defective piling works were discovered at two 34-storey residential blocks at Yu Chui Court in early 2000. The blocks were later demolished, with the sale of the remaining flats delayed until new flats were built. The delay cost the authority about $600 million.

The authority had sought $200 million from the contractor but said last night that the $80 million was already 'in excess of the net asset worth of Zen'.

The housing scandal erupted in 1999 after several Housing Authority buildings in Sha Tin, Tin Shui Wai and Tung Chung were found to have substandard pilings.

A government inquiry and two similar investigations in 2000 levelled the blame at frontline staff and cleared all major officials of responsibility.

Former authority chairwoman Rosanna Wong Yick-ming resigned on the eve of a Legco motion of no confidence in her in June 2000.

Ms Wong and former senior housing officials Tony Miller and Dominic Wong Shing-wah were then criticised and held responsible by the Legco select committee investigating the scam.

Several contractors and frontline staff were later arrested and jailed for their parts in the scandal, in which short pilings were used in foundations to save money.