Factories offered $1.7m to clear out

PUBLISHED : Monday, 17 April, 2006, 12:00am
UPDATED : Monday, 17 April, 2006, 12:00am

Operators at the Housing Authority site say the compensation, equal to 10 years' rent, is inadequate

Operators at a public, low-rental factory estate in Tsuen Wan which is due to be demolished at the end of the year have been offered up to $1.7 million, or 10 years' rent, in compensation.

The sweetener came yesterday amid mounting protests by operators at the Tai Wo Hau Factory Estate. But some quickly rejected the offer as inadequate, threatening to take their case to Chief Executive Donald Tsang Yam-kuen.

The Housing Authority plans to clear the 1.4-hectare estate, built in the 1960s, and return the site to the government for redevelopment.

Factory operators will have until the end of October to move out or face forced eviction.

But they have been fighting for more compensation, claiming they cannot afford rent in the private market, which they said could be 10 times the amount they are paying the authority.

Some wanted extra compensation for losses on fittings or fixtures.

The latest offer would enable operators to collect an ex-gratia allowance of between $56,000 and $1.7 million each when they vacate their premises.

So far, 158 operators occupying close to 40 per cent of the about 1,000 units have refused to budge. Of the remaining units still occupied, 88 are still in active use, according to the authority.

The authority yesterday suggested further concessions would be unlikely, maintaining affected operators had no legal rights to any compensation. 'It is the [authority's] established practice to offer [ex-gratia allowances] to assist affected tenants to re-establish their business elsewhere,' said an authority spokesman.

He said the allowances took into account losses for fixtures and other expenses incurred in moving to new premises.

The spokesman added it was impossible to compensate operators fully for their losses, as it was not the practice of landlords to compensate tenants when adequate notice was given for termination of occupancy.

One operator, Foo Yee-so, who runs a coffin-making workshop, said many private landlords did not want to rent premises to him because the funeral-related business was considered a nuisance in the Chinese community.

Mr Foo, who has been offered $700,000 in compensation, said he might be forced to sack his 25 workers.

Legislator Wong Kwok-hing of the pro-Beijing Federation of Trade Unions, who has been supporting the operators, said the issue was more than a case of 'inadequate compensation'.

'Many operators cannot find a suitable factory lot big enough to house their machinery. I hope the government can help relocate them,' he said.

Mr Wong, with factory operators' representatives, is expected to meet Permanent Secretary for Housing, Planning and Lands Thomas Chan Chun-yuen this month. He could not rule out protests outside the chief executive's residence if the authority continued to ignore their demands.