10,000 flats fall behind schedule
More than 10,000 flats that were supposed to be on the market by 2013 are behind schedule, thanks to slow tendering by the MTR Corporation.
The flats, originally scheduled to have been completed from 2009, would have helped to alleviate pressure on the market by supplying it with more small and medium-sized homes.
An academic and lawmakers want explanations for the delay and have urged the government, as the biggest shareholder in the MTRC, to speed up implementation of the West Rail projects.
All 12 projects were transferred from the Kowloon-Canton Railway Corporation to the MTR Corp after the merger of their rail operations in December 2007. The MTR Corp does not own the sites but only acts as a government agent to implement the projects.
While the corporation shares lucrative profits with developers in other projects in core urban areas, such as Lohas Park at Tseung Kwan O station, Lake Silver at Wu Kai Sha and the newly tendered project at Austin station, it will get only 10 per cent of net profits accrued to West Rail subsidiaries after projects are awarded.
The corporation's records show only two of the 12 West Rail projects - Tsuen Wan West and Nam Cheong - have been tendered by the corporation since the merger, providing about 5,000 flats by 2013 and 2015. The Tuen Mun project was tendered by the KCRC in 2006. Schedules of other projects are under review, the corporation's annual report said.
But according to the original tendering and completion programme drawn up before the merger and obtained by the South China Morning Post, at least six projects - Tin Shui Wai, Long Ping South, Yuen Long, Kwai Fong and two other sites in Tsuen Wan West - were expected to be completed by 2013.
Given that an average of four years is required from tendering a project to its completion, the six projects, providing a total of 10,422 flats, will not be able to meet the original schedule even if they are tendered this year.
And even if the government tenders all the projects now, it will stifle the appetite of developers as such large projects, involving more than 1,500 flats, come with substantial land premiums.
Three projects - Long Ping North, Kam Sheung Road and Pat Heung Maintenance Centre - were expected to be completed by 2014 to 2016, under the original programme. They can still meet that target if the corporation tenders the projects shortly.
With the government under growing public pressure to supply cheaper flats and to reduce the risk of a property bubble, housing minister Eva Cheng said last month that 55,000 flats would be made available on the private market over the next three to four years.
That projection, having taken into account the two tendered West Rail projects Tuen Mun station and Tsuen Wan West station, means an annual supply of about 14,000 flats - way below the average annual demand of 20,000.
The West Rail projects will supply more than 29,000 flats but over 21,000 are still awaiting tenders.
Apart from easing the strain on the property market, flats along the West Rail are a big source of passengers for the railway, which has been suffering from a lack of patronage.
There was an average of 200,000 daily passenger trips on West Rail in 2006 and 2007. The KCRC had estimated a figure in excess of 800,000 by 2011. A West Rail spokesman refused to disclose figures since the merger.
An MTR Corp spokesman declined to explain why the projects had been delayed. He said the corporation was an agent of the government and the West Rail companies would work on the tendering.
Although Cheng is a board member of the MTR Corp, her spokeswoman said she only looked at transport issues in that capacity. The bureau said the secretary for financial services and the treasury, Professor Chan Ka-keung, also a board member, decides on the direction of property projects.
The Financial Services and the Treasury Bureau and the Development Bureau, which controls land supply, failed to reply to inquiries by the Post.
A professor of real estate at the University of Hong Kong, Chau Kwong-wing, said the early release of the West Rail projects, mostly in suburban areas, would provide more small to medium-sized flats and slow down the rise in property prices.
'It's a trade-off. The government wants the MTRC to take over the projects to enhance efficiency. But now the corporation is a listed company, it cannot be forced to solely fulfil social needs,' Chau said.
He said the corporation had little incentive to implement the West Rail projects as it only received small profits as an agent. 'It has to consider the interests of small shareholders.'
Lawmaker Lee Wing-tat of the Democratic Party said the government should explain the delay and speed up the projects.
'The government lacks a long-term housing strategy,' he said. 'The bureaus are evading their responsibilities. The Transport and Housing Bureau said the Development Bureau controls the land supply, while the Development Bureau said it is not given a clear housing target.'
Chan Kam-lam of the Democratic Alliance for the Betterment and Progress of Hong Kong urged the government to release the projects as early as possible.