Lawmakers have urged the government to give more financial support to the Urban Renewal Authority, which may have to forgo small redevelopment projects that generate larger losses.
But Development Secretary Paul Chan Mo-po sidestepped their calls in a meeting of the Legislative Council's development panel yesterday, stressing that the authority should remain self-financing, although the government would continue to support the city's renewal works.
Questions arose on whether the authority should focus on bigger projects that generate fewer losses when it announced earlier this month that it had recorded a HK$2.3 billion deficit in the last financial year. A steering committee was set up to find solutions to relieve its long-term financial burden.
One option, according to its chairman, Victor So Hing-woh, was to tighten the threshold for the demand-led redevelopment scheme - meaning that the authority would accept only applications from bigger sites so that more flats could be sold for profit.
But lawmakers from across the political spectrum yesterday rejected the idea of scaling down the authority's commitment to renewal projects. They said it should ask for more money and cooperate with the Housing Society instead.
"Making profit should not be the authority's priority. Its job should be to improve the living environment," New People's Party chairwoman Regina Ip Lau Suk-yee said. "The government has plenty of money and the financial secretary is facing a huge fiscal surplus … Why should the authority be worried?"
The government had injected HK$10 billion into the authority when it was set up in 2001. It has been self-financing since.
The Democratic Party's James To Kun-sun, who also sits on the authority's board, said: "The demand-led scheme came from the renewal strategy formulated three years ago. Why is it suddenly not feasible?"
Any major strategy change should be led by the Development Bureau rather than by the authority, To added. His party colleague Wu Chi-wai said the authority should work with the Housing Society - a non-profit group with a focus on building subsidised flats - if it had difficulties in taking on potentially loss-making projects, like the Thirteen Streets in To Kwa Wan.
"The number of old buildings the authority has to tackle is increasing. The government should lend its full [financial] support if it acknowledges that the authority's works are for the benefit of the city," said pro-government lawmaker Ann Chiang Lai-wan, another member of the authority's board.
So stressed the authority was financially stable, while Chan said the government had to ensure public cash was used wisely.