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No urban-renewal projects will be offered for bidding for at least the next two years despite new rules by the Urban Renewal Authority (URA) to enhance efficiency in aggregating sites.

The postponement is a result of the newly established URA taking over the Land Development Corp (LDC) and adopting a different approach to redevelopment projects.

URA chairman Lau Wah-sum said the authority would not release sites for bidding by developers until they were clear. This meant the eight LDC projects launched in 1999 but not taken up by developers would not be re-launched in the short term, he said.

However, about six to seven early projects, which already had land resumption orders from the Executive Council (Exco), could be ready in two years.

Under new rules, the URA would complete the acquisition and clearance of sites within an average period of 3.5 years, and projects would be launched after about three years, Mr Lau said.

It took the LDC seven years, but the URA will apply for resumption orders from Exco while negotiating with owners over acquisition prices.

Property owners would have about 15 months to consider or negotiate an offer with URA.

When resumption orders were granted, negotiation with affected owners would stop and the Lands Tribunal would decide the acquisition price based on comparable seven-year-old units in the same districts.

The LDC's practice was to secure developer participation in urban-renewal projects before site-assembling because it needed developers' resources to finance acquisitions.

Mr Lau said the LDC operations prompted suspicions that developers and the LDC were conspiring to push down acquisition prices.

The URA approach would plug this speculation, he said. Under the new system, developers would no longer carry the risk of a long acquisition period.

Having cleared a site, the URA would sell it outright to developers or form joint ventures with them.

The joint-venture pattern would see the URA require a higher up-front payment from developers, with a low profit-sharing ratio. This would ensure the URA could recover its acquisition cost promptly and use the funds for other acquisitions.

The URA would like to remain a partner in projects because it wanted to influence developers' designs, ensure the quality of the environment and manage the public facilities, Mr Lau said.

In the URA's first five-year plan, it would spend up to HK$15 billion to develop 60 projects, including 25 taken over from the LDC. It planned to spend HK$250 billion on 200 projects in 20 years.

Mr Lau said the URA would strive to break even in the long term. Measures to increase profitability in redevelopments included waiving land premiums.

The URA had been given flexibility to enhance project profitability. In formulating comprehensive planning for nine target urban areas, the URA could transfer plot ratios from some properties to others within the same area.

The URA would undertake reservation of heritage properties in urban areas and the development potential of these sites could be transferred, he said.

The nine target areas are Kwun Tong, Yau Tong, Yau Ma Tei, Tai Kok Tsui, Shumshuipo, Ma Tau Kok, Tsuen Wan, Wan Chai and Western.



New body flexes muscles as it begins long task of changing the face of urban renewal programmes in Hong Kong