Provisional Legislative Council

PLC Paper No. CB(1) 1379
(These minutes have been seen
by the Administration)

Ref : CB1/PL/HG/1

Panel on Housing
Minutes of special meeting held on Monday, 30 March 1998, at 9:30 am in the Chamber of the Legislative Council Building

Members present :

Hon CHAN Yuen-han (Chairman)
Hon WONG Siu-yee
Hon HO Sai-chu, JP
Hon Mrs Selina CHOW, JP
Hon Ronald ARCULLI, JP
Hon LEUNG Chun-ying, JP
Hon HUI Yin-fat, JP
Hon Andrew WONG Wang-fat, JP
Hon Kennedy WONG Ying-ho
Dr Hon Charles YEUNG Chun-kam
Hon Bruce LIU Sing-lee
Hon LAU Kong-wah
Hon Timothy FOK Tsun-ting

Member attending :

Hon CHAN Wing-chan

Members absent :

Hon Frederick FUNG Kin-kee (Deputy Chairman)
Hon David CHU Yu-lin
Hon Edward HO Sing-tin, JP
Hon CHEUNG Hon-chung
Hon CHAN Choi-hi
Hon CHAN Kam-lam
Hon CHENG Kai-nam
Hon CHOY Kan-pui, JP
Dr Hon TANG Siu-tong, JP
Hon TAM Yiu-chung, JP

Public officers attending :

For item III

Housing Bureau

Ms WONG Chiu-ying,
Principal Assistant Secretary (Housing Strategy)

Housing Department

Mr Vincent TONG,
Business Director/Management

Mrs Winfred CHUNG,
Assistant Director/Administration

Mr C Q LEE,
Senior Housing Manager/Business Process Reengineering

For item IV

Housing Bureau

Miss Sandy CHAN,
Principal Assistant Secretary (2)

Housing Department

Mr LEE King-chi,
Assistant Director/Management (2)

For item V

Housing Bureau

Miss Sandy CHAN,
Principal Assistant Secretary (2)

Buildings Department

Mr H K NG, JP,
Assistant Director/Structural Engineering

Mr C S SIN,
Chief Structural Engineer

Housing Department

Mr S K HO,
Chief Structural Engineer

Mr Ken CHEUNG,
Senior Manager/Consultant Management (Works)

Mr WONG Chi-ching,
Senior Housing Manager (Agency)

Mr Steve LUK,
Atg Senior Maintenance Surveyor (South 5)

Territory Development Department

Mr D J Climas,
Deputy Project Manager/NT East

Mr K C NG,
Chief Engineer/Tseung Kwan O

For item VI(A)

Housing Bureau

Mr David LO,
Assistant Secretary (Special Duty) (2)

Housing Department

Mr LEE King-chi,
Assistant Director/Management (2)

Mr MA Shue-yuen,
Chief Manager/Management (New Territories East)

Mr CHEN Sing-tek,
Chief Maintenance Surveyor/Estate Management Maintenance

For item VI(B)

Housing Bureau

Mr Nicholas CHAN,
Assistant Secretary (4)

Housing Department

Mr C Y LEE,
Chief Housing Manager (Redevelopment)

For item VI(C)

Housing Bureau

Ms Eva TO Hau-yin,
Principal Assistant Secretary (1)

Housing Department

Mr HUI Chee-chung,
Assistant Director (Operations & Redevelopment)

Mr LEE Pak-sing,
Assistant Director (Legal Advice)

Mr CHAN Nam-sang,
Senior Housing Manager (Operations)

Attendance by invitation :

For item III

The Alliance of Staff Unions of Housing Department
Mr SIT Kam-luen
Mr CHAN Siu-tak
Mr SIU Chun-keung
Mr TSE Lung-man

For item IV

The Coalition of Overcrowded Families of the Federation of Hong Kong, Kowloon and New Territories Public Housing Estates Resident and Shopowner Organizations
Mr WONG Kwun
Mr MAN Yu-ming
Ms LAW Lai-kuen

Clerk in attendance :

Ms LEUNG Siu-kum,
Chief Assistant Secretary (1)2

Staff in attendance :

Miss Becky YU,
Senior Assistant Secretary (1)3

I Confirmation of minutes of previous meetings

(PLC Paper Nos. CB(1) 1217 and 1218)

The minutes of the meetings held on 10 and 23 February 1998 were confirmed.

II Information paper issued since last meeting

2. Members noted that no information papers had been issued since last meeting.

III New management model for Tenants Purchase Scheme (TPS) estates

Meeting with the Alliance of Staff Union of Housing Department
(PLC Paper No. CB(1) 1219(01))

3. The deputation expressed grave concern about the far-reaching impact of the new management model to be applied to the six TPS estates. The new model, if implemented, would give rise to a 42.9% cut in the establishment and the deletion of the post of maintenance surveyors from the staffing structure. The deputation apprehended that the surplus staff resulted from the re-engineering exercise would be forced to accept early retirement as was the case with the recent closing down of the Squatter Control Unit. The exclusion of maintenance surveyors would deprive professional involvement in day-to-day maintenance and would affect the provision of quality maintenance service to TPS owners. The deputation therefore urged the Administration to undertake that in considering any major reform or restructuring of the Housing Department (HD), the Administration would strictly adhere to the provisions under Article 100 of the Basic Law and the Civil Service Bureau Circular No. 26/91 issued on 31 December 1991 regarding staffing arrangements upon privatization or corporatization, and that internal transfer instead of termination of employment or mandatory retirement would be arranged for any surplus staff.

Meeting with the Administration
(PLC Paper No. CB(1) 1219 (02))

4. At the invitation of the Chairman, the Business Director/Management (BD/M) highlighted the salient points in the information paper. He stressed that the introduction of the new management model was to take account of the change in the land status of the six TPS estates from being under the management and control of the Housing Authority (HA) by virtue of Vesting Orders to leasehold estates after April 1998. Under the new model, the management of these estates would be carried out by two different units: the Property Management Unit (PMU) would be responsible for the control and management of the common parts of the land and buildings within the residential portion of TPS estates according to the provisions under the Deed of Mutual Covenant (DMC) and the Building Management Ordinance while the Tenancy Management Unit would focus on tenancy matters relating to the public housing tenants remaining in these estates. Staffing cost for the former would be met by management fees and the latter by HA.

5. Noting that under the DMC of TPS estates, HA would only serve as the property manager for an initial period of two years and re-appointment thereafter would be subject to owners' decision, a member asked if HA, being the owner of tenanted flats and the largest undivided shareholder of these estates, would exercise its power to vote for the retention of HA's service upon expiry of the initial management period. BD/M emphasized that HA had no intention to interfere with the decision of TPS flat owners. In fact, HA would encourage owners to take over the management of their own property through the formation of Owners Corporations (OCs) within a year after the signing of the first DMC. During the transitional period, the existing Estate Management Advisory Committees would be transformed into the first Estate Management Owners Committees (EMOCs) to look after the management of TPS estates. BD/M added that HA would not assume any role as key office-bearers in EMOCs nor in OCs in order to allow for unfettered participation by owner-occupiers.

6. A member expressed concern that PMU staff would become redundant if HA failed to secure re-appointment as the property manager after expiry of the initial two-year management period. BD/M recognized that in order to contend with tenderers in the private sector, efforts had to be made to enhance the competitiveness of PMU. To this end, measures would be introduced which included requiring all PMU staff members to be multi-tasked to improve service standard and streamlining the staffing structure under PMU to control cost with a view to maintaining the management fees at a comparable level with outside property management agents (PMAs). BD/M however assured members that no PMU staff would be rendered jobless even if TPS flat owners decided not to employ HA as the property manager. The surplus staff would be absorbed in posts generated as a result of the substantial number of impending pubic housing projects over the next ten years. In reply to a related question, BD/M clarified that the Administration had no intention to put HD staff in the open market to compete with PMAs in the private sector, and the objective of the new management model was to improve productivity and service standard. BD/M also confirmed that HA would not contract out the management of TPS estates to PMAs after re-appointment.

7. As regards commercial premises in TPS estates, the Senior Housing Manager/Business Process Reengineering advised that if these formed part of the residential portion of the estates, HA would need to pay the management fees calculated according to the number of undivided shares of these premises. The estimated monthly management fee for TPS estates would be at about $1.0 per square foot. BD/M however pointed out that commercial premises in the six TPS estates were separated from the residential portion.

8. A member asked if the re-engineering exercise under the new management model was part of the Administration's plan to corporatize HD. BD/M clarified that idea of corporatization was still under consideration and details had yet to be mapped out. He assured members that formal consultation with the staff unions concerned would be carried out in accordance with the Civil Service Regulations if corporatization were to be introduced.

IV Overcrowding relief in public housing estates

Meeting with the Coalition of Overcrowded Families of the Federation of Hong Kong, Kowloon and New Territories Public Housing Estates Resident and Shopowner Organization
(PLC Paper No. CB(1) 1219(03))

9. The deputation was aggrieved at the prevailing housing policy on space allocation standard for public rental housing (PRH), under which new PRH tenants could enjoy a living density of over eight square metres per person while some sitting tenants had to sustain a living density below four and a half square metres per person. Furthermore, the annual quota of 3,000 PRH flats for overcrowding relief (OR) was no longer adequate to meet the demand having regard to the increase in the number of overcrowded households as a result of addition of family members from the Mainland. The deputation therefore urged the Administration to consider relaxing the overcrowding standard from the prevailing five and a half to six square metres per person; increasing the quota for OR from the current 3,000 to 6,000 PRH flats per year; reviewing the priority for OR to take into account family structure apart from degree of overcrowding; and allocating additional flats to overcrowded families if larger flats were not available.

Meeting with the Administration
(PLC Paper No. CB(1) 1219(04))

10. A member sought clarification on the difference between the figures on overcrowded families provided by the Administration and the deputation. The Assistant Director/Management(2) (AD/M(2)) explained that this was because some families had already improved their living condition through either Waiting List, Comprehensive Redevelopment Programme or home purchase. The current average waiting time for OR through Waiting List was six and a half years. This would be reduced to three years by 2005 as pledged in the Chief Executive's first Policy Address. AD/M(2) added that arrangements had also been made for overcrowded households in TPS estates to buy vacant PRH flats with priority.

11. On the deputation's views, the Principal Assistant Secretary for Housing(2) (PAS for H(2)) admitted that although the space allocation standards had been revised several times over the years, some tenants might not be able to benefit from the relaxation due to limited public housing resources. To this end, the Administration had, in the 1995 Policy Commitments, pledged to re-house at least 24,000 overcrowded families over the next three years. The pledge would be met by September 1998. PAS for H(2) however stressed that in considering proposals to further improve the existing space allocation standards and quota for OR, the Administration had to take into account other committed housing categories, particularly when there was still a substantial outstanding demand on the General Waiting List. On the suggestion of reviewing the priority for OR to take account of family structure, PAS for H/2 considered that the existing criteria based on the degree of overcrowding were more objective. Nevertheless, she would welcome concrete proposals from the deputation. AD/M(2) supplemented that due to limitation of available housing resources, applications for additional flats for OR would not be accepted except under special circumstances, such as where families with a household size of over 10 persons and single tenants with different applications and screening numbers sharing the same PRH flat with family members coming from the Mainland.

12. Noting the high refusal rate of 51% by overcrowded households to offers of flats, a member suggested that the Administration should announce all the reception flats for OR in one go so that eligible households were aware of the locations of these flats and could make an early decision. He also suggested that HD should review the allocation system and expedite the allocation process. AD/M(2) took note of the member's suggestion but advised that the aspiration of tenants concerned for re-housing within the same estate had hampered the process of OR. To redress the situation, a new allocation system for OR had been adopted since 1996. Under the new system, reception flats would first be offered to eligible families living within the same estate of the flats in accordance with the degree of overcrowding. Flats not taken up would be allocated to other eligible families within the same district.

13. As regards the time-table for resolving overcrowded cases, AD/M(2) advised that at present, efforts on OR were still focused on households with a living density below four and a half square metres per person. The time required for solving the overcrowding problem would be subject to the availability of housing resources. The majority of members were not convinced of the Administration's explanation as the pledge for annual provision of least 85,000 flats should be able to meet the demand for OR. Mr HIU Yin-fat however considered that applicants on the Waiting List should have priority over overcrowded sitting tenants as the latter had already benefited from public housing subsidy.

V Construction quality and structural safety of buildings under subsidized home ownership schemes and the responsibility of Housing Authority
(PLC Paper No. CB(1) 923(02), 1102(07) and 1219(05))

14. Mr LAU Kong-wah was of the view that the recurrence of soil settlement problem in Kam Fung Court had revealed the lack of a monitoring mechanism on the part of HD in ensuring the quality and maintenance standard of flats sold under subsidized home ownership schemes. In response, the Senior Manager/Consultant Management (Works) (SM/CM (W)) reiterated that soil settlement was a normal phenomenon in reclaimed land and further settlement was expected to diminish over time. He assured members that HD had in place a robust checking system to ensure that the structures and foundations of buildings under the subsidized home ownership schemes were constructed in accordance with the requirements under the Buildings (Construction) Regulation and relevant codes of practices. PAS for H (2) added that a number of measures had also been implemented since 1993 to enhance the quality of flats under the Private Sector Participation Scheme. These included upgrading of finishing requirements, more stringent control on selection of contractors and extension of liability period for scheduled defects. The Administration would continue to look at ways to improve the existing mechanism for monitoring the quality of flats under subsidized home ownership schemes. The Administration also undertook to consider stipulating in future sales brochures the possibility of site settlement for projects built on reclaimed land to alert buyers of the constraint.

15. Members then enquired about the latest progress of remedial works in both On Ning Garden and Kam Fung Court.

On Ning Garden

16. PAS for H (2) reported that HD had completed rectification works of all known defects associated with soil settlement except for a section of a covered walkway pending the result of a television survey on the underground drainage. As regards the cracks and fallen concrete found inside the flats, PAS for H(2) advised that the professional staff of HD had conducted an investigation into the structural conditions of the buildings at On Ning Garden in October 1997. The findings showed that these buildings were structurally safe. The Buildings Department had also reviewed the case and considered that there was no need for further inspection at the present stage. However, the case would be kept under review so that any unforeeseable change in safety conditions of these buildings could be detected and dealt with in good time.

17. Regarding the responsibility for rectifying problems relating to soil settlement after the expiry of the ten-year guarantee period, PAS for H (2) advised that HD was committed to carrying out repair work associated with soil settlement should the developer fail to comply with its ten-year undertaking up to December 2000 and would recover the cost from the developer concerned. SM/CM (W) supplemented that as site settlement would normally be stabilized after 10 years, further rectification works would not be necessary.

Kam Fung Court

18. SM/CM (W) advised that soil settlement had been allowed for in the design and construction of Kam Fung Court. The buildings were constructed on piled foundations resting on firm stratum and therefore should not be affected by any subsequent soil settlement. Furthermore, pipes with movable joints had been used in underground services to minimize the effect of soil settlement. SM/CM (W) assured members that as Kam Fung Court was a Home Ownership Scheme project, HD would take up the necessary investigation and repairs associated with soil settlement.

VI Any other business

(A) Installation of air conditioners in public rental housing estates
(PLC Paper No. CB(1) 1211)

19. AD/M(2) reported that at present, there were only some 70 cases remained to be rectified under the first phase of the enforcement action against unauthorized installation of air conditioners. He assured members that HD would continue to help the tenants to solve the technical problems in the rectification works. However, if tenants concerned persisted to refuse to rectify their unauthorized installations without good reasons before the expiry of the grace period in end May 1998, HD would have no choice but to issue notices-to-quit to these tenants. Members remained of the view that HD should not adopt such a high-handed approach in dealing with cases of unauthorized installation.

20. As regards the 22 cases where re-installation of air conditioners were required as a result of malpractice of HD's staff in the approval process, the Chief Structural Engineer advised that these cases were still under investigation and a final decision would be made in due course.

(B) Clearance policy on Temporary Housing Areas (THAs)
(PLC Paper Nos. CB(1) 1219(06) and (07))

21. Members were disappointed at the lack of a definite time-table for clearance of the remaining 11 THA. The Chief Housing Manager (Redevelopment) (CHM/R) stressed that the pace of clearance would hinge on the availability of re-housing resources. Nevertheless, the Administration would announce the schedule for the clearance of half of these THAs in May 1998. CHM/R added that the entire THA clearance programme could only be accelerated if households concerned would lower their expectation on the location of reception estates.

22. A member was not convinced that the means test should affect the eligibility of THA residents for PRH. He suggested that THA residents who failed the means test could be required to pay market rent upon admission to PRH. In response, CHM/R emphasized the need for the means test to ensure that the limited public housing resources were given only to those in genuine need of subsidy. In reply to a related question, CHM/R confirmed that the majority rule for PRH would not apply to eligible THA residents and additional family members could be included for re-housing.

(C) Compensation for former Tiu Keng Leng residents
(PLC Paper No. CB(1) 1219(08))

23. PAS for H (1) advised that following the High Court judgment on the Judicial Review proceedings relating to the Tiu Keng Leng Cottage Area delivered on 19 March 1998, the Administration had to vary the amount of compensation for each eligible household according to the formula set by the Court. The estimated cost of the new compensation package was $574.08 million. Subject to members' views, the Administration would seek the approval of the Finance Committee on the funding proposal at its meeting on 3 April 1998.

24. While members were generally in support of the proposal, a member asked if the Administration would apologize to the parties concerned for the long delay in reaching a final decision on the compensation package. PAS for H (1) responded that it was not the Administration's intention to delay the compensation. The Administration was now working expeditiously towards an early settlement of the case.

(D) Draft report of the Panel for submission to the Provisional Legislative Council
(PLC Paper No. CB(1) 1219(09))

25. The Chairman advised that according to Rule 77(4) of the Rules of Procedure of the Council, the Panel should submit at least one report during the session to the Council. The draft report had been circulated to members vide PLC Paper No. CB(1) 1219(09). Members took note of the draft report and authorized the Clerk to make necessary modifications to the report taking into account issues discussed at the last and current meetings.

26. The Chairman announced that this was the last meeting for the session. She warmly thanked the Administration for its contributions at the meetings, and the Secretariat for its support.

27. The meeting ended at 12:50 pm.


Provisional Legislative Council Secretariat
23 June 1998