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Quinton Chan

THE Government is reported to be bargaining to get its hands on some of the Housing Authority's unused billions of dollars in cash reserves.

  The Treasury is believed to want to take charge of the reserves, which could generate a valuable source of additional revenue from annual interest income and investment returns.

  Governor Chris Patten has said he does not see any good reason for the Housing Authority to keep such a large reserve instead of putting it to use.

  Secretary for the Treasury Donald Tsang Yam-kuen was reported yesterday as confirming the Finance Branch and the authority were reviewing their financial relationship.

  But he stressed there had been no result, and dismissed as mere speculation reports that the Government would take charge of the fund.

  However, that possibility has aroused the concern of legislators and Housing Authority members, who last night warned it would harm the development of the authority.

  The Housing Authority's budget shows it will have a balance of about $15 billion by the end of March, although it is not clear how much of this constitutes reserves.

  Reports yesterday said the authority had suggested setting up a Housing Authority reserve fund that could use the money to finance future housing developments.

  Housing Authority chairwoman Rosanna Wong Yick-ming confirmed discussions were being held with the Government on a new financial relationship, saying their cash reserves should have a better rate of return.

  ''We, of course, have to do some suitable investment of such a large sum of money in order to have a better rate of return.

   ''The authority is very cautious on this point,'' she said.

  Existing regulations state the multi-billion dollar reserves - comprising tenants' deposits, constructors' deposits and first instalment payments from Home Ownership Scheme buyers' - can only be kept as bank deposits.

  She refused to say how the money might be used, stressing any surplus should be put to use on improving residents' living conditions.

  ''If the authority has any surplus in the future, we, of course, have to use it in a reasonable way, to improve residents' standard of living and living conditions,'' she said.

  Mr Tsang said the Government would give the Housing Authority's proposal thorough consideration.

  But legislator Frederick Fung Kin-kee said the Government should not take any money from the Housing Authority: ''Why shouldn't the Housing Authority manage the money by itself?''   He said new laws should be drafted, that would allow the fund to be used for investment purposes, a move supported by a majority of authority members at a meeting in August.

  Mr Fung also suggested part of the fund be used to build more public flats.

   ''All tenants would never move out and take back their deposits in one day,'' he said.

  Democratic Alliance for Betterment of Hong Kong spokesman Wong Kwok-hing claimed there would be an adverse impact on the development of the authority if the Government did begin to receive a portion of its capital.

    ''Rosanna Wong told us before that the biggest problems of the Housing Authority were shortage of land and capital. So, the Housing Authority should have the full authority to manage their capital,'' he said.

    Legislator Zachary Wong Wai-yin said the Government should develop more efficient financial arrangements with the authority.



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