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Sandy Li

The Land Development Corp (LDC) projects its debt will be HK$6.1 billion at the end of the year before the future Urban Renewal Authority (URA) takes over its operation.

The URA, empowered to acquire areas for demolition as it deems appropriate, will be set up next year.

Abraham Razack, who resigned as LDC chief executive on Saturday, said the corporation would transfer its existing net assets worth HK$944 million and its 23 urban renewal projects - which involve 9,856 households - to the URA when it was set up.

The LDC now employs 350 staff.

Following his departure from the LDC, Mr Razack will contest as an independent the real estate and construction constituency seat in September's Legislative Council elections.

Mr Razack said the LDC, affected owners and tenants should not be the only groups held responsible for delays in slum-clearance work. The Government was also responsible.

He cited the incident in which the Government took 18 months to remove five remaining cooked-food operators from a Mongkok project after the LDC spent HK$4 billion buying almost 99 per cent of the property.

The LDC claimed the delay cost the corporation HK$30 million a month, or HK$1 million a day, in interest, undermining the profitability of the office-hotel project at Argyle and Shanghai streets.

Mr Razack said it also took the LDC years to complete the site-assembling work in an urban renewal project in Tsuen Wan, even though it had secured about 90 per cent ownership.

The delay not only wasted time, but also cost the LDC hefty interest expenses, he said.

To hasten urban renewal, Mr Razack suggested the proposed URA concentrate on site-assembling instead of property developments.

The future URA chairman would need to win government support to accelerate the authority's site-assembling works, he said.

In order to avoid disputes, the URA would have to exercise extreme caution when drawing up rehousing and compensation packages for the affected residents and landlords, Mr Razack added.

'Everybody should have a choice whether to sell their properties or not,' he said. 'None of the affected owners or tenants became homeless during the LDC's land resumption in the past 13 years.' With the formation of the URA, the Government hoped to shorten the land resumption period from 48 to 60 months down to 18 to 24 months.

Chief Executive Tung Chee-hwa said in his Policy Address in October that the URA would waive land premium charges on its redevelopment projects to speed clearance of urban slums. The Government would also provide profit-making sites to be linked to loss-making projects.

Mr Tung hoped the new approach would see slums rejuvenated in 20 years, instead of the presently estimated 30 years.

Meanwhile, Mr Razack regretted the LDC had not redeveloped Shamshuipo during his employment.

The self-financing LDC had committed almost all its resources to the urban renewal projects at Tsuen Wan Town Centre and Kennedy Town New Praya because the living environments there were much worse than in Shamshuipo, he said.

He hoped the new URA would make the Shamshuipo redevelopment its top priority.

Mr Razack said site-assembling works on urban renewal sites now undertaken by the LDC would be almost completed before the corporation's handover to the URA.

The LDC had earlier applied to exercise the land resumption rule to complete its ownership of the remaining nine units at the proposed redevelopment site at Hanoi Road, Tsim Sha Tsui.

The proposed project, scheduled to be completed in 2005, will provide 490,838 square feet, or 476 units, of serviced apartments, 282,318 sq ft of office space and 208,520 sq ft of commercial space, as well as 12,916 sq ft of open spaces.

Mr Razack believed the Government would accept the application.

This was the first project that employed the Owners' Participation Proposal, which allows affected residents and landlords to participate in the redevelopment through cost-sharing, he said.

Mr Razack said the LDC had not been adversely affected by the property slump following the regional financial crisis.

It managed to complete most of its redevelopment projects in 1997 and unloaded them before the market downturn, he said.

These included its share of spaces in The Center and The Grand Millennium Plaza in Sheung Wan, Chow Tai Fook Centre and Ginza Plaza near Yau Ma Tei.

The LDC had to sell its completed projects as soon as possible to finance its proposed redevelopment projects in Tsuen Wan and Kennedy Town New Praya, Mr Razack said.

He said developers had become more cautious about participating in urban redevelopment projects after the market doldrums, given a decline in potential return.

The company has not been adversely affected by the property slump 



Corporation debt set to hit $6b after clearance delay