Hong Kong's Urban Renewal Authority records surprise HK$1.1b surplus
Result contradicts concerns about the body's finances, which prompted its head to resign
The Urban Renewal Authority recorded a recurrent surplus of HK$1.1 billion in the past fiscal year - contrary to earlier concerns over the state of its finances that led to an open dispute among its top management and the resignation of its former managing director.
The latest figure was announced yesterday after the URA's board of directors met to hear about the self-financing statutory body's financial performance in the fiscal year ending in March.
It was the first meeting after the new managing director, Daniel Lam Chun, assumed office on Monday. He took over from Iris Tam Siu-ying, who quit last month citing "fundamental differences" with chairman Victor So Hing-woh on the URA's direction and warning the public body against acting like a profithungry developer.
The surplus was in contrast with the deficit of HK$2.3 billion in the previous year, mostly attributable to demand-led projects under which owners of dilapidated buildings could take the initiative to apply for URA acquisition for redevelopment.
"I don't think at the moment the URA has any financial crisis. But looking forward, if we are not able to claw back a lot of plot ratio gains and planning gains, then we must be careful of what we do because we are spending public funds … We have to be very prudent," Lam said as he met the press in his new position for the first time.
He had served on the URA board as non-executive director for seven years prior to his new job.
Asked if he would put social responsibility or financial viability first, Lam said both were important but asked: "Without ingredients, how can you cook a meal?"
The surplus was largely due to upfront payments received from developers for five projects it tendered in the past year and a share of flat sales proceeds, Victor So explained.
The chairman also cautioned against an overly optimistic reading of the surplus, adding that rising construction costs and property acquisition prices might still put pressure on the URA's finances in the longer run.
Lam agreed to take up the job for 10 months on an interim basis while the government looks for a successor through an open recruitment process.
Upon his appointment, he publicly vowed not to put his name forward as a candidate for the longer-term job. His deputy, Pius Cheng Kai-wah, yesterday also ruled himself out for the position.
Alice Mak Mei-kuen, a non-executive director of the organisation, warned that it might not be able to make HK$1.1 billion every year.
"The URA should not just launch projects which bring about surpluses. I hope the government would not just look at this year's surplus and think the URA has a lot of money."
