URA set to open up its books on projects

PUBLISHED : Saturday, 12 June, 2010, 12:00am
UPDATED : Saturday, 12 June, 2010, 12:00am

The financial details of individual urban renewal projects - a closely guarded secret since the Urban Renewal Authority was set up in 2001 - will be disclosed on Monday.

Information on the gains or losses on individual projects and the amount in nominal land premiums paid is expected to trigger debate about whether the authority should self-finance redevelopment projects.

The financial operation of the URA is being reviewed by the Development Bureau, a process to be completed by the end of this year.

The government injected HK$10 billion into the authority when it was established in 2001.

But how much each renewal project has gained or lost has been kept from the public until now. The authority has only disclosed an overall gain or deficit on a yearly basis since it began operating.

This sparked criticism from lawmakers and activists, who urged more transparency.

It was only last June that the authority made a commitment in the Legislative Council to consider making the details public as far as possible.

A person who has seen the details said the figures would be submitted to the Legislative Council later this month but they would be released to the media in a government briefing on Monday.

However, only the financial details of eight projects, including the Langham Place development in Mong Kok, will be disclosed as the sale of flats and shops in the remaining projects has not been completed. The authority has carried out 45 redevelopment projects and four preservation schemes.

The authority is expected to have made a profit in the last financial year. The projects tendered last year increased cash flow as the co-developers of the Lee Tung Street (Wedding Card Street) redevelopment in Wan Chai and phase one of the redevelopment in Kwun Tong have already paid an initial redevelopment cost.

In contrast, the authority recorded an operating deficit of HK$4.5 billion for the 2008-2009 financial year as a loss provision was made for the Kwun Tong Town Centre project.

James To Kun-sun, a non-executive director of the authority and a Democratic Party lawmaker, said the authority would be forced to justify its profit and losses after the release of financial details.

'It's good for the authority to have a candid conversation with the public,' To said. 'But you can't blame the authority for giving a certain amount to affected residents while making huge profits.'

To said people living in a flat more than 30 years old were given compensation equivalent to a seven-year-old flat, but the authority does not know whether a project will make a profit until the moment the flats are sold.

'It will suffer a loss if flats are sold during a downturn in the property market.'

He said profits were spent on other redevelopment and conservation projects.

City renewal

The URA has done 45 redevelopments and four preservation projects

The government injected this much, in HK dollars, into the authority when it was established in 2001: $10b