Insurers offer only half of what court ruled the Housing Authority deserved
A consortium of insurers based in Germany is to pay the Housing Authority $230 million for losses caused to the authority by a short-piling scandal at Tin Chung Court, Tin Shui Wai, since late 1999.
But this amount is less than half of what the Court of First Instance ruled the authority was entitled to receive after it won a legal battle against B+B Construction Company, which is in liquidation, in December last year.
The piling scams surfaced in 1999 after several Home Ownership Scheme buildings in Sha Tin, Tin Shui Wai and Tung Chung were found to have substandard pilings. The discovery was made in late July when lifts could not be installed in two buildings at Tin Chung Court because they were tilting due to uneven settlement of the foundations.
Last year, the authority sought damages from B+B. The damages included the cost of the remedial and restoration work, and financial losses arising from delays to completion and handing over of flats to purchasers.
The court ruled B+B should pay $553 million to the authority. B+B's insurer AXA was also a defendant. The legal cost of suing B+B cost the authority $70 million. There are still 640 unsold units in Tin Chung Court.
In early 2000, defective piling work was discovered at two 34- storey residential blocks at Yu Chui Court in Sha Tin. The blocks were later demolished, with the sale of the remaining flats delayed until new flats were built, at a cost to the authority of about $600 million. In September 2003, construction company Zen Pacific agreed to pay the Housing Authority $80 million to compensate it over those defective piling works.