TWO questions need to be answered in the wake of the dramatic events surrounding the forced eviction of residents from six streets in To Kwa Wan earmarked for redevelopment. Why do such incidents occur? And does the Government's plan to allow private developers to apply for land resumptions in order to boost the supply of flats mean we can expect more such incidents in the future? The two questions need to be addressed especially because Hong Kong's land resumption compensation package was described as ''fair'' in the Report of the Special Committee on Compensation and Betterment completed in 1992. ''We consider that the Hong Kong system, where compensation is paid based on open market values when land is taken, is fair and reasonable,'' the committee said. ''When account is taken of the ex gratia element it compares more than favourably with the treatment given to landowners elsewhere. At one recent international conference it was cited as the most generous on a spectrum, at the other end of which was Singapore.'' The popular view among members of the public is that those affected owners and tenants who resist eviction are being greedy and trying to hold out for more. That may well be true, but only to a certain extent. In fact, officials involved in administering the compensation scheme point out that most affected owners and tenants are satisfied with their offers. This is because properties are acquired at market value and tenants in most cases are provided with subsidised housing. Some small businesses complain about not getting fair compensation for business losses mainly because they are unable to provide sufficient evidence of their turnover. These disputes do not seem to indicate any fundamental problem with the compensation schemes. But what about those sorry tales reported in the media? Take the case of an old man in his 60s who has operated a watch shop underneath a staircase for more than 30 years. He was given an allowance of only $6,800 because his stall was an illegal structure. The old man was aggrieved because the Government, having allowed his stall to exist for all that time, had also required him to pay rates on what it was describing as an illegal structure. Another shop operator complained he was told his wall-side stall, which he bought for $20,000 12 years before and had been charged rates for, was an illegal structure. The official justification for not compensating these ''property'' owners is spelled out in the Crown Lands Resumption Ordinance, which states that compensation may not take into account any non-conforming uses. Officials admit they do have sympathy with some of the complainants, but there is nothing they can do. ''In some cases, it is clear that the owner of the illegal structure, who is usually old and has little education, was cheated by the previous owner,'' one official said. ''But how can you say that to an old man in his twilight years?'' As one Housing Society official pointed out, the public perception was that paying rates and business licence fees gave the property legitimacy, although this was not so in the eyes of the law. While he also had sympathy with owners of these illegal structures, he was concerned that more such illegal premises would crop up if more generous compensation was offered. What concerned him most was that disgruntled owners and tenants had already accused the Land Development Corporation and Housing Society of conspiring with property developers to drive them out of their properties, even though both were statutory non-profit-making organisations. If private developers are to be allowed to apply for land resumption, he was worried disputes between developers and affected residents would be perceived in an even more negative fashion. Indeed, housing was such a big problem in the 50s and 60s that illegal extensions were commonplace among buildings completed in that period. Three years ago, the Government estimated there could be up to one million illegal structures and only a small number have since been cleared. In some cases, the buildings are so old that their original building plans have been lost, causing great difficulty in ascertaining whether dwellings are properly erected. This being the case, there are bound to be many more tales of old folks getting a pittance for property they bought for good money years ago. Another problem which officials are concerned about is the different compensation packages offered by the Land Development Corp and Housing Authority. Although both are statutory bodies, each has its own way of dealing with affected owners and tenants. For example, while the Housing Society acquires old domestic premises based on their market value, the LDC offers owners an additional allowance over and above the market value of their property to enable them to buy a recently built flat in the vicinity. The LDC recently revised the level of its compensation to tenants who opt for a lump-sum payment. The cash payout is more than four times that required by law. Those who opt for rehousing are provided with accommodation at subsidised rents in flats bought by the LDC on the open market. On the other hand, the Housing Society can easily re-house affected tenants in some of the more than 30,000 rental units under its management. The different terms offered by the LDC and Housing Society have already caused problems to officials of the two bodies who were taken to task by District Board members keen to extract a better deal for their electors. Officials fear if the problem of illegal structures and the discrepancy between LDC and Housing Society compensation terms are not tackled properly, allowing private developers to apply for land resumption will only mean more trouble and more violent confrontations.