Hong Kong's Urban Renewal Authority stuck in crisis of confusion

Uncertainty over the role and direction of the controversial authority has led to conflicts and the resignation of the managing director

PUBLISHED : Tuesday, 31 March, 2015, 12:44pm
UPDATED : Wednesday, 20 June, 2018, 5:12pm

The sudden resignation of the Urban Renewal Authority's managing director has further exposed conflicts over the role of the organisation, which has been struggling under increasing financial pressure and public expectations of its mandate.

Rising compensation amounts, efficiency of flat acquisition, staff size and revitalisation projects have been areas of discord between URA chairman Victor So Hing-who and staff headed by outgoing managing director Iris Tam Siu-ying over the past two years.

A draft review report presented late last year which was critical of her team, has fuelled her discontent, according to serving and past members of the board.

On the instruction of Financial Secretary John Tsang Chun-wah in late 2013, the URA commissioned a study to review its operations.

Two people with knowledge of the draft report said it was critical of the URA's management, particularly casting doubt on the cost-effectiveness of its expanding staff.

Tsang has since told the URA to be more prudent with its finances, the sources said.

A former director of the URA, who served both before and during So's tenure, said the changes So sought to introduce were noticeable, triggering disagreements with members of the board and senior staff.

A controversial idea So had put up at a brainstorming session last year was to consider outsourcing the URA's property acquisition role to the private sector, the source said speaking on condition of anonymity

"It was clear to us that So was appointed to reform the URA. Two things that he wanted to slash were the seven-year rule and the demand-led redevelopment scheme," he said.

He was referring to the law that requires the URA to pay flat owners compensation equivalent to the cost of a seven-year-old flat in the same district, and a scheme under which the URA takes on developments at the request of the owners of dilapidated buildings.

While So has sought to lower the compensation requirement, board members told him the Legislative Council would be unlikely to approved the change.

The demand-led redevelopment scheme has accumulated losses of HK$3 billion. The URA last year decided to tighten the application criteria so that buildings on small sites would not be considered.

Another conflict over the URA's functions was whether it should be involved in conserving heritage buildings.

An incumbent board member, who also asked not to be named, said So had raised doubts over a revitalisation plan for Central Market after an updated estimate put the construction costs at over HK$1 billion - more than double the original budget in 2009. Tam, however, remained supportive of the project.

Recently, Chief Executive Leung Chun-ying asked the URA in his policy address to provide subsidised housing, bringing even more confusion over the body's role.

Dennis Kwok, a non-executive director of the URA and a Civic Party lawmaker, blamed the government for putting the authority in a dilemma by not supporting it financially.

"The government has to decide which role the URA should take … [URA] is not just a property developer but has its social mission too," he said.