Hong Kong Housing Authority to drop 10-year home finance plan

The Housing Authority is quietly abandoning plans to draw up a 10-year financing blueprint for its public housing programme.

A source with knowledge of the decision said it had been reached after officials had failed - after almost a year of trying - to come up with credible estimates of key financing variables like inflation and funding options over the life of the decade-long plan to build thousands of affordable homes in the city.

Instead of trying to forecast financing needs and market conditions years in advance, the authority will instead maintain a constant review of project costs and seek money from the government's new housing reserve "closer to the time of need".

The approach will allay government concerns that large lump-sum payments to the authority could be wasted if calculations were wrong.

"It's easy just to make some forecasts. But what we want is more than that. We hope to work out some conditions with the Housing Authority. Our key concern is to ensure that they won't squander public money after receiving a lump sum from the government," the source told the South China Morning Post.

The task to draw up a long-term assessment was announced in Financial Secretary John Tsang Chun-wah's annual budget speech last February, amid concern over the self-financing institution's ability to achieve the government's then ambition to build 280,000 public housing flats in a decade.