COMPENSATION for tenants whose homes are demolished for Land Development Corporation projects is to soar. The LDC said the increase - to 6.5 times rateable value in some cases - was partly due to complaints from tenants and was intended to take care of families with low incomes. Tenants had previously been offered compensation of twice rateable value. The Government itself offers compensation of 1.7 times rateable value. Rateable value is equivalent to the annual rent at which a unit may be reasonably be expected to let. LDC chairman Steven Poon Kwok-lim said: ''The LDC now has more money and we hope to fulfil our duty in improving the quality of housing for the community by giving them a higher amount of compensation. We also think that the compensation offered by the Government is too low. ''We hope under the new compensation package, the resumption process will be smoother.'' Most tenants will now receive money equal to five times the rateable value. Those who agree to surrender their flats within three months from the date of offer will receive an additional 30 per cent - lifting the cash offer to 6.5 times the rateable value. A single person living in a 40-square-foot home will receive up to $27,000 under the new package - before he would have received only $7,000. A three-member family living in a 500-square-foot flat will receive as much as $283,000, compared to $87,000 under the old system. Mr Poon said the corporation had done quite well in resuming residential units, but had had some problems with commercial units. In a project in Queen Street, Central, the corporation recently decided to increase the offers to shop owners by 10 to 20 per cent. Anticipating a strong financial situation over the next few years, Mr Poon said the LDC would develop projects which might not be considered financially viable. It had selected about 10 such projects out of the 41 which had been shelved for financial reasons. The corporation is not allowed to borrow money from outside or from the Government in addition to the $30 million it started off with in 1988. Mr Poon said the LDC would ask the Financial Secretary Hamish Macleod whether it could use profits to subsidise projects which were likely to lose money. ''In the next six years, our financial condition will be very strong and we want to undertake some projects which are urgent and beneficial to the community,'' Mr Poon said. The LDC has amended standing orders governing declaration of interests by members of the managing board. This was done in reaction to an alleged conflict of interests concerning an LDC project which will involve Cheung Kong, with which Mr Poon has business dealings. The amendment requires members to disclose indirect interests as well as direct ones when a contract is put to the managing board for discussion. It also encourages members to declare interests if they have a family or business relationship. Mr Poon said allegations that he and corporation members had not declared their interests were unfounded because they did so every six months. The Cheung Kong project was approved before his appointment, he said.