Union Hospital built luxury homes on its land
Report takes Health Department to task for lapses that allowed Union Hospital to use its site for developing 'Sha Tin's Mid-Levels'
A private hospital built luxury housing on part of a piece of land it was granted for health-care use, the Director of Audit has found.
The auditors revealed that the hospital operator started attempting to turn the 1.92 hectare plot of land in Sha Tin into luxurious private flats four years after it paid HK$60 million for a site on which to build a private hospital. This was despite the fact that the application for the residential project was approved by the government only 15 years later.
It was also found that the approval was given despite the fact that there was a shortage of hospital beds in the district at the time.
The revelations were made in a report in which the Director of Audit slammed the authorities for failing to ensure that the operations of private hospitals were compatible with the conditions set out in their land grants, which are often given at little or no cost to private hospitals.
A spokeswoman for Union Hospital yesterday said - in response to the auditor's report, which did not name the hospital - that it sold part of the site to Henderson Land for the residential project because of low demand for private beds.
It was an "ice age" for private hospitals at the time the change of use was applied for, the spokeswoman said, adding that all required procedures were followed in the process.
"We are not a charity," she said, but she added that the proceeds from the land sale were ploughed back into the development of the hospital.
However, the Director of Audit's report accused the hospital of departing from the original intended use of the site.
"Although due process appeared to have been followed ... the subsequent change in use of such a sizeable portion of the hospital site for private residential development ... has departed significantly from the original intended use," the report said.
The auditor said the government needed to "learn a lesson" from the the hospital's actions.
Some 0.88 hectares of the site - or 46 per cent - remained undeveloped for nearly 20 years before it was approved by the Executive Council in 2001 for use as a private residential development.
The entire hospital site was originally slated to provide up to 600 beds. Union Hospital currently provides some 410 hospital beds.
The spokeswoman said yesterday that there was still space for adding 300 beds in the next few years.
The report said that the hospital had made repeated attempts to turn the site into a residential project since 1986, four years after it acquired the site in 1982.
After repeated rejections, an application was finally approved in 2000 by the Town Planning Board, saying that the unused portion of the land would not be necessary for the hospital's expansion.
The hospital operator paid HK$610 million in land premiums for the land-use change.
The report noted a Planning Department estimate that there was a shortage of 890 hospital beds in Sha Tin. But according to the hospital spokeswoman, it later used the proceeds from the land sale to add a few stories to the existing hospital block.
The residential project was later named Hill Paramount, and was packaged as a luxury residence in "Sha Tin's Mid-Levels", with 157 homes.
The report also said the hospital was said to have provided too few free or low-cost beds, even though it was a condition of the hospital's land grant that a portion of available beds should be priced lower than others, in the public interest.
The Health Department was also criticised for failing to scrutinise subletting activities - when hospital space is rented to other medical service providers - to make sure the activities were in line with grant conditions.
There are 11 private hospitals in the city, providing some 4,000 beds.