'The strategy review will, I hope, define our objectives, what problems we're trying to solve and then say this is how we'll do it. A fresh assessment of the needs would be a good place to start,' said the former McKinsey consultant.

The starting point for the URA, which succeeded the Land Development Corporation (LDC) in 2001, was to tackle urban decay and improve the living conditions of residents in slum areas. This meant knocking down blocks of dilapidated buildings, compensating owners and tenants and building new towers.

'Redevelopment is one of the best poverty alleviation measures that exists today,' said Mr Cheung.

While the community expects more urban renewal, there are concerns that present approaches are destroying the character and vibrancy of 'old Hong Kong'. Wedding Card Street in Wan Chai, now demolished, was a recent flashpoint in an emotional battle for Hong Kong's urban soul.

The parameters for the URA were set out in a 2001 strategy on urban renewal. Preservation - whether of historical buildings, social networks or local character - came well down the list of objectives.

The URA has 36 redevelopment projects in hand at a cost of about HK$68 billion. They range from developing 'toothpick' sites to mega projects, such as a new town centre for Kwun Tong. Current spending on rehabilitation is HK$184 million in loans and assistance to the owners of 430 buildings. The URA is also preserving 28 pre-war buildings, with the cost absorbed by the projects concerned.

'While redevelopment will continue to be important, preservation, rehabilitation and revitalisation will also become more important,' said Mr Cheung.

He added that preservation was 'not going to be cheap'. Resources would need to be allocated separately.

'To expect those costs to be somehow covered by redevelopment costs would eat into compensating owners and tenants,' he said. 'If the community says it's important to preserve more buildings, to have more space devoted to social enterprises and things like that, then the community needs to provide resources for them. The resources should not come at the expense of people living in affected poor areas.'

Preservationists query how any agency that takes a percentage from redevelopment deals with commercial partners can deliver genuine urban revitalisation. Among them is Chan Wai-kwan, who has advised Wan Chai District Council and is a former member of the Town Planning Board. He challenged the URA to show evidence of any project where it had successfully developed a run-down area and turned it a vibrant lively urban area, such as London's Docklands.

'They started with a flawed financing model which forces the URA to have the instinct to act like a property developer. So they are going for the best sites in the urban areas,' he said. 'Instead of renewing and regenerating the older parts of our city - to add life to the older part of the city, which already has life - you have a combination of a government agency and private developers to destroy the city.'

But Mr Cheung said the URA had 'probably done more for the preservation of historic buildings than anyone else in Hong Kong' and would do more in the coming years. He acknowledged that 'not much attention' was paid to renewal in the past. The URA's headquarters in Sheung Wan, for example, was located in a huge office block that cut into a network of small streets and curio shops. It was an LDC project completed in 1997.

'The community weren't expecting anything to be done about that then,' said Mr Cheung.

He said he saw the review as an opportunity to grasp the bigger nettle of urban regeneration. Already, the URA must have the support of relevant district councils before submitting projects to the Town Planning Board for approval. Mr Cheung wants a more holistic, district-based approach.

'Instead of focusing on individual projects, we should take a look at a whole area and plan with significant input from people from the area,' he said. Providing a vision and context would make it easier for people to agree on what is needed, what should be preserved or redeveloped, he added. It would also allow flexibility to transfer plot ratio - which determines the size of a building on a site - from one project to another.

Land administration and planning expert Nicholas Brooke said such an approach would be more tenable and acceptable to those concerned about revitalisation and regeneration.

'You need a holistic approach, certainly, and you need a master-plan-type approach but then you implement it in small parcels and build up the matrix over time. I wonder if you need the URA for that?' said Mr Brooke, who is chairman of Professional Property Services and a former deputy chairman of the Town Planning Board. 'I think a lot can happen spontaneously. You don't need a heavy hand or an institutional-type organisation to implement or facilitate that sort of process.'

Mr Brooke said the need was for an agent not an agency. 'There is a scenario in my mind, especially for small and medium-sized schemes, where district councils could well be that agent if they are given appropriate funding and professional support and take responsibility. The district councils are best able to set the priorities in their district, they are best able to know what will bond and keep the community together and enhance the community aspects. I'm not sure a big organisation like [the] URA is going to have that sensitivity. Yes, they can do their social impact surveys and all the rest but it's more than that - a feel, a touch for what's needed,' he said.

Dr Chan believes the URA should first work with the government to identify and build consensus on what constitutes 'the old city of Hong Kong'. It should then adopt a 'preservation first' strategy, cross-subsiding revitalisation with money-making URA projects. If the economic equation was still not right, he said, the URA should ask the government for more money in the public interest. 'If urban renewal is to work, the outcome shouldn't just be new buildings, even decent buildings, it should be a new form of social spirit or social life,' he said.

Mr Cheung said that if adjustments were needed, they should be made. 'We're not wedded to the old approach,' he said. 'We're quite open to new approaches. In fact, we have a slogan for the Year of the Rat: 'New Thinking, Sensible Balance'.'