Legislative Council

LC Paper No. CB(1) 1231/98-99
(These minutes have been seen
by the Administration)

Ref: CB1/PL/HG/1, CB1/PL/PLW/1

Members present :

Members of Housing Panel

Hon LEE Wing-tat (Chairman)
Hon Gary CHENG Kai-nam (Deputy Chairman)
Hon NG Leung-sing
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
*Hon Ronald ARCULLI, JP
*Hon James TO Kun-sun
Hon LEUNG Yiu-chung
*Hon LAU Kong-wah
Hon Timothy FOK Tsun-ting, JP

Members of Planning, Lands and Works Panel

Hon Edward HO Sing-tin, JP (Chairman)
Dr Hon TANG Siu-tong, JP (Deputy Chairman)
Hon WONG Yung-kan

Members absent :

Members of Housing Panel

Hon David CHU Yu-lin
*Hon HO Sai-chu, JP
Hon Albert HO Chun-yan
Hon LEE Cheuk-yan
Hon Fred LI Wah-ming
Hon CHAN Yuen-han
Hon CHAN Kam-lam
Hon Andrew WONG Wang-fat, JP
Dr Hon YEUNG Sum
*Hon Andrew CHENG Kar-foo
Hon SZETO Wah
*Hon TAM Yiu-chung, JP

Members of Planning, Lands and Works Panel

Dr Hon Raymond HO Chung-tai, JP
Hon LAU Wong-fat, GBS, JP

* Also members of the Planning, Lands and Works Panel

Public officers attending :

Housing Bureau

Mr Andrew Wells

Deputy Secretary for Housing

Planning, Environment and Lands Bureau

Mr Patrick LAU

Deputy Secretary for Planning, Environment and Lands

Mr Esmond LEE

Principal Assistant Secretary for Planning, Environment and Lands

Lands Department

Mr Herbert LEUNG

Assistant Director of Lands

Clerk in attendance :

Ms LEUNG Siu-kum

Chief Assistant Secretary (1)2

Staff in attendance :

Miss Odelia LEUNG

Chief Assistant Secretary (1)1

Miss Becky YU

Senior Assistant Secretary (1)3

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I Election of Chairman

Nominated by Mr LEE Wing-tat and seconded by Mr Ronald ARCULLI, Mr Edward HO was elected Chairman of the joint meeting.

II Programmes for land sale and land disposal
(LC Paper Nos. CB(1) 1044/98-99(01) and (02))

2. At the invitation of the Chairman, the Deputy Secretary for Planning, Environment and Lands (DSPEL) highlighted the salient points in the information paper. He stressed that the policy objective in drawing up the Land Sale and Development Programmes for 1999/2000 to 2003/2004 was to ensure stability in the property market and to provide sufficient land to meet the long-term need of Hong Kong.

Land Sale Programme for 1999/2000

3. On the regular land auction and tender programme, Mr NG Leung-sing asked if the lack of urban sites in Kowloon side for auction and in Hong Kong side for tender as illustrated in Annex B to LC Paper No. CB(1) 1044/98-99(01) was due to the insufficient supply of land in respective districts. In reply, DSPEL clarified that the number of sites to be included in each land sale programme would hinge on the time upon which these sites were made available rather than the districts at which they located. As regards the basis upon which the method of land sales was determined, DSPEL advised that this would depend on the size of the sites. In general, small private residential sites which had greater attraction would be put under the auction programme while larger sites mainly used for Private Sector Participation Scheme (PSPS) or non-housing uses such as carparks would be put under the tender programme.

4. On the new Application System, Mr LEE Wing-tat noted that 22 hectares of land for private housing had been earmarked for sale under the new system. He asked if the sites concerned were readily available for sale to meet demand. Referring to the sale schedule for the sites under the Reserve List in Annex C to LC Paper No. CB(1)1044/98-99(01), DSPEL advised that most of these sites would be available for sale during the period from April to September 1999 and the remaining by March 2000 at the latest. Interested parties were required to apply to the Lands Department (LD) for the sale of these sites not more than three months before the earliest available date and to indicate the minimum price they were prepared to offer. Early applications would not be processed until three months before the earliest available date. If LD considered that the minimum price was acceptable, it would put the site for sale under the regular land auction or tender programme as appropriate. As regards the number of flats to be produced from individual sites, DSPEL advised that this had to be worked out according to the respective plot ratios provided under the Reserve List. Nevertheless, it was estimated that a total of 4,300 flats would be produced from the sites in the Reserve List.

5. In reply to Mr LAU Kong-wah's question, DSPEL confirmed that LD had in place a mechanism through which an estimated price for each site in the Reserve List could be arrived at. However, the actual price of a site had yet to be worked out three months before the earliest available date to take account of the market situation at that time. Upon receipt of an application, LD would conduct a valuation meeting to determine whether the minimum price proposed was acceptable. If so, LD would notify the applicant of acceptance of the application. Upon confirmation of acceptance backed by the stipulated deposit from the applicant, LD would decide on the sale date which would normally be within two months from the date of notification, arrange advertisement/gazettal and distribution of the land sale documents. To ensure a level-playing field, LD would announce the accepted minimum price upon gazettal of the sale of the land. DSPEL added that LD could always reject an application if it considered the minimum price proposed not acceptable. At members' request, the Administration undertook to provide information on the price-setting mechanism.

(Post-meeting note: The required information was circulated vide LC Paper No. CB(1) 1227/98-99.)

6. Mr Ronald ARCULLI expressed worries that the requirement for an applicant whose proposed minimum price for a site had been accepted by LD to pay a deposit as specified on the Reserve List in the form of a cashier order or a cheque certified good for three months would hold up the capital of the applicant concerned, in particular when the deposit involved a large sum of money. Furthermore, as the deposit was non-interest bearing, it would not be of benefit to the Government nor the applicant. The only party which might earn interest from the deposit would be the banking institution. To address the problem, Mr ARCULLI suggested that instead of requiring deposit from applicants, the Administration should consider accepting certificate from banking institutions on the financial well-being of the applicants. While acknowledging Mr ARCULLI's concern, DSPEL stressed that the requirement for deposit in land sales was the same as the case in the land tender programme. The deposit cheque would be retained uncashed for a period of about two months until completion of the tendering process. Nevertheless, the Administration would expedite the process with a view to shortening the period within which the deposit was required. Mr James TO however remarked that unlike the land tender programme which was arranged by the Government, the sale of sites under the new application system had to be triggered by applications. He cautioned that the requirement for deposit might discourage applications from potential applicants since a loss of interest would incur if they were unsuccessful in obtaining the sites. As a banker, Mr NG clarified that banking institutions could not earn interest from the deposit if this was in the form of a cashier order or a certified cheque since they had to get ready the money for withdrawal at any time. In view of the large sum of deposit involved, in particular for those larger sites, Mr NG urged that the Administration should re-consider the issue of deposit arrangement.

7. As to whether the Administration would consider dividing the Government Supplies Depot at Oil Street and the Kowloon Tsai Military Quarters Sites at Kowloon Tong under the Reserve List into smaller lots so that they could be put up for sale by way of auction instead of tender, the Assistant Director of Lands advised that it might not be feasible for these two sites since they had been earmarked for Comprehensive Development. Nevertheless, the Administration had considered similar views expressed by members at previous meetings and had divided a large site at Area 58, Tuen Mun in the Reserve List for Auction into two smaller lots viz. TMTL 371 and 449.

Land Development Programme for 2000/2001 to 2003/2004

8. In response to the Chairman, DSPEL advised that if there was a sudden surge in demand for land which could not be met by the Land Sale Programme for 1999/2000, the Administration would use the land under the Land Development Programmes for 2000/2001 to 2003/2004 to make up the shortfall. The Administration would expedite the land formation process under such circumstances. As regards the timing and method of land sales for 2000/2001 to 2003/2004, DSPEL advised that these had yet to be decided taking into account the market condition at that time.

Private Treaty Grants

9. Mr LEUNG Yiu-chung asked how many of the 103 hectares of land would be allocated for educational use. He also enquired if the Administration, in deriving the allotment, had taken into account the number of Mainland-born children of Hong Kong permanent residents who would be eligible to come to Hong Kong as a result of the verdict of the Court of Final Appeal (CFA) on their right of abode in Hong Kong. DSPEL replied that a detailed breakdown on the 103 hectares of land had yet to be worked out. He said that in formulating the Land Sale Programmes for 1999/2000 to 2003/2004, LD had consulted all relevant policy bureaux, including the Education and Manpower Bureau (EMB), to ascertain their demand for land over the next five years. DSPEL however admitted that as the Land Sale Programmes were devised before the announcement of the CFA's verdict, the Administration was not able to take into account its impact on land supply. Nevertheless, an inter-departmental working group comprising PEL, EMB and relevant departments had been set up to study the problems arising from the verdict including the possible surge in demand for school places. As land might not be readily available, consideration had been given to optimize the use of the existing schools such as increasing the number of floors in each school. The establishment of school estates was another possible solution where common facilities could be shared among schools. In reply to a related question, DSPEL advised that the Administration would not allocate additional land reserve for educational purpose as EMB might have already included a safety margin in its five years' plan submitted to LD. He considered that the most practicable way was to review the Land Sale Programme annually to take account of the changing circumstances.

Land for housing development

10. Mr LEUNG noted that when the Home Ownership Scheme (HOS) development project at Woodside Quarry Bay was discussed, a government official insisted that albeit the demolition of the Red House situated in the site, the development was essential since there would be a shortage of flat supply in 2004/2005. He therefore questioned if the 205 hectares of land earmarked for public housing were sufficient to meet demand. In response, the Deputy Secretary for Housing reiterated that the Administration was committed to providing an average of 50,000 new public sector flats annually for the period from 1999/2000 to 2006/2007. To ensure timely delivery of flats, the Administration had adopted a site-specific approach to monitor the progress of flat production. It was anticipated that 200,000 HOS/PSPS/Sandwich Class Housing Scheme/public rental housing (PRH) flats would be produced from 1999/2000 to 2001/02 and 260,000 HOS/PSPS/PRH flats from 2002/03 to 2006/2007. Although the number of flats to be produced each year might fluctuate due to factors such as the nine-month moratorium on land sales, the Administration was confident that the pledge for average production of 50,000 flats could be achieved.

II Any other business

11. There being no other business, the meeting ended at 12:00 noon.

Legislative Council Secretariat
30 April 1999