Legislative Council

LC Paper No. CB(1) 1415/98-99
(These minutes have been seen
by the Administration)

Ref: CB1/PL/HG/1

Panel on Housing

Minutes of meeting
held on Monday, 1 March 1999, at 4:30 pm
in the Chamber of the Legislative Council Building

Members present :

Hon LEE Wing-tat (Chairman)
Hon Gary CHENG Kai-nam (Deputy Chairman)
Hon HO Sai-chu, JP
Hon Edward HO Sing-tin, JP
Hon LEE Cheuk-yan
Hon Fred LI Wah-ming
Hon NG Leung-sing
Hon Ronald ARCULLI, JP
Hon CHAN Yuen-han
Hon CHAN Kam-lam
Hon LEUNG Yiu-chung
Dr Hon YEUNG Sum
Hon LAU Kong-wah
Hon Andrew CHENG Kar-foo
Hon TAM Yiu-chung, JP

Members absent :

Hon David CHU Yu-lin
Hon Albert HO Chun-yan
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon James TO Kun-sun
Hon Christine LOH
Hon Andrew WONG Wang-fat, JP
Hon Timothy FOK Tsun-ting, JP

Public officers attending :

For item IV

Housing Bureau

Miss Ophelia TSANG,
Principal Assistant Secretary (2) (Acting)

Housing Department

Business Director/Allocation and Marketing

Assistant Director/Applications & Home Ownership

For Item V

Housing Bureau

Miss Ophelia TSANG,
Principal Assistant Secretary (2) (Acting)

Mr Peter K K MAK,
Assistant Secretary (Special Duties)2

Housing Department

Mr Joseph C F KONG,
Project Director (Central)

Mr Jovis S K LO,
Chief Architect (Vetting)

For item VI

Housing Bureau

Deputy Secretary (1)

Assistant Secretary (4)

Housing Department

Business Director/Allocation and Marketing

Chief Housing Manager/Operations

Lands Department

Mr Bernard CHAN,
Chief Estate Surveyor/Estate Management

For item VII

Housing Bureau

Deputy Secretary (1)

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

Attendance by invitation :

For Item VI

The Coalition on Safeguarding the Rights of Cottage Areas in Hong Kong
Ms TONG Yim-yung
Mr KAM Hung-fai
Mr LEUNG Kwong-lam
Mr NG Wing-yin
Mr AU Him

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 meeting
(LC Paper No. CB(1) 915/98-99)

The minutes of the meeting held on 7 December 1998 were confirmed.

II Information paper issued since last meeting

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

III Date of next meeting and items for discussion

Joint meeting on 30 March 1999

3. A joint meeting with the Panel on Planning, Lands and Works had been scheduled for Tuesday, 30 March 1999, at 10:45 am to discuss "Programmes for land sale and land disposal".

Special meeting on 30 March 1999

4. Members agreed that a special meeting would be held on Tuesday, 30 March 1999, at 11:45 am to discuss "The Majority Rule for allocation of public rental housing flats to Waiting List applicants", "Mixed development concept for the redevelopment of public housing estates", "Sandwich Class Housing Scheme" and "Re-housing policy for clearees of Temporary Housing Areas".

Meeting for April 1999

5. The next regular meeting would be held on Monday, 19 April 1999, at 4:30 pm to discuss "Buy or rent scheme" and "Corporate reform of the Hong Kong Housing Authority".

IV Addition of family members to public rental housing tenancies of single elderly tenants and size of one- to two-person flats for elderly households
(LC Paper Nos. CB(1) 784/98-99, 823/98-99 and 924/98-99(01))

Addition of family members to public rental housing tenancies

6. In response to the Chairman, the Business Director/Allocation and Marketing (BD/A&M) advised that under the existing housing policy on addition of family members, adult children of elderly tenants could not be added into the public rental housing (PRH) tenancies. However, temporary stay could be granted to genuine cases where the elderly tenants required the personal attention of their adult children. Dr YEUNG Sum remarked that as the adult children granted with temporary stay were not authorized occupants of the flats, the elderly tenants were worried that their adult children would be evicted from PRH after they passed away. Expressing similar concern, Ms CHAN Yuen-han and Mr LEUNG Yiu-chung considered that the restriction on addition of adult children of elderly tenants was at variance with both the Central Government's policy to allow Mainland children of Hong Kong permanent residents to come to Hong Kong for reunion and the Chief Executive's pledge to care for the elderly.

7. In response, BD/A&M stressed that the Administration had been encouraging people to live with their elderly family members. To this end, a number of priority housing schemes for families with elderly persons had been implemented, such as the Families with Elderly Persons Priority Scheme and the Special Scheme for Families with Elderly Persons. Eligible applicants under these schemes would have their waiting time shortened or enjoy special allocation arrangements. The Administration also allowed for a one-line continuation of PRH households, under which the spouse of one of the tenant's married children (also an authorized occupant of the flat) could be added to the tenancy. BD/A&M cautioned that the addition of adult children of elderly tenants to PRH tenancies would give rise to an inequitable situation whereby persons so added could by-pass the normal channel in gaining access to PRH. This would be unfair to applicants on the Waiting List (WL). While acknowledging the need to avoid "queue jumping", Mr CHAN Kam-lam was of the view that the Administration should adopt a more flexible approach in considering requests from elderly tenants for addition of adult children, in particular those requests involving adult children whose names had been previously deleted from PRH tenancies as a result of marriage etc. BD/A&M affirmed that special consideration would be given to the latter cases, provided that the elderly tenants concerned had never exercised their rights under the policy of one-line continuation of PRH households nor split their tenancies before.

8. Dr YEUNG asked if the Administration would approve requests from elderly tenants for addition of adult children on compassionate grounds upon recommendation of the Social Welfare Department (SWD). BD/A&M confirmed that these applications would be considered taking into account the justifications given and the circumstances such as the health, economic and social conditions of the elderly tenants. If addition was considered not acceptable while there was a genuine need for the adult children to stay in the flat temporarily to look after the elderly tenant, temporary stay with a validity period, depending on individual circumstances, would be granted. As to whether the Administration would consider granting temporary stay to adult children of elderly tenants automatically under certain circumstances such as when the tenants had reached a prescribed age, BD/A&M replied that this would be examined in the context of a review on the current criteria for processing applications in respect of addition of persons on special grounds.

9. Mr Fred LI considered that the Administration should also review the current arrangement under which adult children staying temporarily with elderly tenants in estates due for redevelopment were not eligible for re-housing. He pointed out that most of the adult children were from the Mainland, and some of them might have already been staying with their elderly tenants in PRH for some seven to eight years. BD/A&M responded that for those adult children who had come to Hong Kong for more than seven years, they should have been allocated PRH had they been registered on WL upon arrival to Hong Kong. To enhance a better understanding on the application eligibility for PRH, the Administration had put up publicity posters in all Housing Information Centres informing new migrants that they could register on WL upon arrival to Hong Kong.

10. Mr LEUNG expressed concern that the temporary stay of adult children in PRH flats might result in overcrowded condition. He enquired if relief measures were in place to address the problem. In response, BD/A&M stressed that the granting of temporary stay should not give rise to additional demand for housing resources. Adult children concerned could return to their own homes at night-time to avoid overcrowdedness in PRH. However, if the elderly tenants could demonstrate that their adult children had no place to stay apart from the PRH flats, and that the overcrowded condition was intolerable, re-housing for the whole family to Interim Housing (IH) might be considered. The households concerned would be required to register on WL upon re-housing to IH. PRH would be offered when their turn for allocation came up. Mr LEE Cheuk-yan however pointed out that the living conditions of elderly tenants would be compromised in the event of re-housing to IH.

11. As regards dependent children of elderly tenants under the age of 18, BD/A&M confirmed that they could be added into PRH tenancies under the existing housing policy. He also clarified that the Administration would not procrastinate the processing of the application for addition of dependent children. Mr LI questioned the rationale for the different arrangement between the addition of dependent and adult children to PRH tenancies. He reminded the Administration that the demand for Comprehensive Social Security Assistance from elderly tenants would be reduced if they could receive care from their adult children. This would in turn save public resources. Mr LEE supplemented that elderly tenants might end up living in residential care homes if their adult children could not be added to PRH tenancies to look after them. He pointed out that the recommendations in the Consultancy Study on the Needs of Elderly People in Hong Kong for Residential Care and Community Support Services commissioned by SWD had confirmed that family care was better than residential care. In reply, the Principal Assistant Secretary for Housing (2) (Acting) said that there was no conflict between the prevailing housing and welfare policies. She reiterated that the Administration had put in place a number of priority housing schemes to encourage families to live with their elderly members. Eligible applicants under these schemes would have their waiting time shortened or enjoy special allocation arrangements. Mr LEE however pointed out that adult children of elderly tenants coming from the Mainland would not be eligible for these schemes as they failed to meet the majority rule for PRH.

12. As to why the Administration could allow the addition of elderly family members to PRH tenancies on the one hand while prohibiting the addition of adult children of elderly tenants on the other, BD/A&M explained that there were fundamental differences between these two categories of addition. In the latter case, the spouse and offspring of the adult children concerned could eventually be added to the tenancy which might give rise to demand for extra housing resources such as additional flats for overcrowding relief. Moreover, as the persons so added could by-pass the normal channel in gaining access to PRH, this would result in queue jumping. In order to avoid such inequitable situation, the requirement to establish the absolute need of elderly tenants for the addition was considered appropriate.

Size of one- to two-person flats for elderly households

13. Dr YEUNG remarked that an internal floor area (IFA) of a small unit of about 17 square metres was not sufficient for two-person elderly households, particularly when the tenants concerned had to use wheelchairs. Mr LI also considered it a retrogression in the flat allocation standard if three-person households were to be allocated to flats with an IFA of 22 square metres while they were given one bedroom flats in the past. BD/A&M advised that under the current allocation standard of seven square metres IFA per person, flats with IFA of 17 and 22 square metres should be enough to accommodate two- and three-person households respectively. Moreover, the layout plan of these flats had also been improved to allow more maneuvering space. BD/A&M added that if wheelchairs were considered necessary for elderly tenants, these would be counted as one additional person in the allocation of PRH. The Chairman was not convinced of the Administration's response. He remained of the view that flats with an IFA of 22 square metres should be allocated to two-person households only.

V Tendering and monitoring systems for quality assurance of building works of the Housing Authority
(LC Paper No. CB(1) 924/98-99(02))

14. At the invitation of the Chairman, the Project Director (Central) (PD(C)) highlighted the salient points in the information paper. He stressed that the Housing Authority (HA) was very serious about construction quality. To this end, HA adopted an effective tendering system in the selection of contractors and a stringent monitoring system in ensuring quality of building works. As a step forward, HA was conducting a comprehensive review to further improve the existing tendering and monitoring systems.

15. On tendering system, Mr HO Sai-chu and Dr YEUNG Sum expressed concern that construction quality would be compromised if only the lowest tender was accepted. PD(C) took note of members' concern but advised that measures had been in place to ensure the quality of contractors. HA had its own lists of contractors for various types of works and would only invite contractors on the relevant lists to tender for its works. A contractor was required to have appropriate experience and organization, adequate plant resources and financial capability, as well as certification by the International Standards Organization before it would be considered for inclusion in the lists. In awarding a contract, HA would determine the tendering eligibility of contractors using the Performance Assessment Scoring System (PASS), under which tenderers' performance in the past 12 months together with their financial capability, workload in hand and tender price would be taken into consideration. In response to Mr HO's question, PD(C) confirmed that industrial safety was also a crucial factor in assessing the performance of contractors. Good performers with proven track records were given better tendering opportunity. Consideration was being given to use an alternative tender evaluation system in which emphasis would be placed on past performance and incentive to improve quality.

16. Mr CHENG Kai-nam expressed concern about the existing requirement that a contractor had to tender for the entire building project instead of tendering for only a number of items within the project. He considered the requirement unfair, in particular to those small contractors since they might not be financially capable for the entire project. In reply, PD(C) clarified that contractors were not allowed to tender for individual items if these formed part of a single building contract. In awarding a contract, HA would only invite a few eligible tenderers from its lists of contractors. Interested parties had to ensure that they had enough working capital for the project. If they withdrew their tenders at a later stage of the tendering process as a result of insufficient working capital, they would be subject to disciplinary actions, including removal from the list of approved contractors.

17. As to why tenders for HA's architectural works were usually lower than those for Works Bureau, PD(C) assured members that HA would check with the tenderers concerned if the bids were considered too low. It might reject the tenders if the explanation given by the tenderers was not acceptable. He also undertook to include in the review the tendering system for architectural works as suggested by Mr HO.Admin

18. Mr LEUNG Yiu-chung was of the view that HA should work out cost estimates for its works and reject tenders with prices below the estimates. PD(C) replied that although HA had a pre-tender estimate for each of its building contract, this would not be used as the upset price for tenders since the amount of bids put forward by tenderers were purely commercial decisions taking into their own business strategies. He nevertheless undertook to provide a comparison of contract sums with pre-tender estimates for HA building contracts for the past three years.

(Post-meeting note: The required information was circulated vide LC Paper No. CB(1) 1084/98-99.)

19. On monitoring system, PD(C) explained that under the new monitoring system, quality of building works would be monitored at different stages. At the commencement of a project, emphasis would be put on getting the right standards through the provision of sample wings and sample trades. During construction, critical checks on quality and progress would be made with a view to identifying and rectifying any irregularities promptly. At the pre-handover stage, HA would inspect all the flats and external areas to ensure that outstanding rectification works were carried out properly. Mr Edward HO remarked that despite the adoption of the existing monitoring system, numerous complaints in respect of quality of public housing flats had been received. He was doubtful about the effectiveness of the new monitoring system. The Chief Architect (Vetting) advised that the requirement for sample wings and sample trades under the new system would provide a clear and consistent benchmark of acceptance standards for HA to check and rectify any sub-standard works. On the satisfactory rate for building projects under the purview of HA, PD(C) advised that satisfactory level was difficult to quantify in view of the rising expectation over the years. Nevertheless, HA was committed to improving the quality of public housing production.

20. Members generally felt that the provision of a sample flat might not be useful since defects such as site settlement, seepage and falling tiles from external walls could only be found after the flat was completed for a period. They also expressed concern that HA might have to accept sub-standard works to avoid delay in the delivery of flats. PD(C) assured members that construction quality would not be compromised for timely delivery of flats. He stressed that HA would carry out stringent final flat-to-flat inspection at the pre-handover stage. The inspection would include watertightness test to all the windows and joints of precast facade, an infra-red scanning test of waterproofing, a pressurized water test for plumbing fitting and a close circuit television drainage test. Vibration test and loading test were carried out on a random sample of piles to verify their length and capacity before final acceptance. Consideration was being given to contract out simple inspection works so that HA staff could concentrate on critical milestone checks.

21. As regards sub-contracting of construction works, the Assistant Secretary for Housing (Special Duties)2 advised that this was very common in both the public and the private sectors, and that there was no limit on the levels of sub-contracting To enhance a better quality culture for the entire construction industry, the Hong Kong Construction Association, the Construction Industry Training Authority (CITA) and the Real Estate Developers Association had jointly launched a pilot scheme to encourage construction companies to employ labourers on a permanent basis. Although the effect of the scheme had yet to be confirmed, it had gained extensive support from HA, as well as the relevant bureaux and departments. PD(C) added that HA also attached great importance to the quality of labourers of its contractors. To this end, HA contractors were required to ensure that 35% of their labourers had passed the trade tests organized by the Vocational Training Council and CITA. Despite the Administration's assurance, members remained concerned that construction quality would be compromised as a result of sub-contracting. They asked if the Administration would consider penalizing contractors in the event of poor construction quality. PD(C) affirmed that the non-performance of contractors would be reflected through PASS which would affect their future tendering opportunity.

22. As the production of public housing flats would be increased substantially over the next few years, the Chairman stressed the need for HA to ensure construction quality of these flats. He opined that HA should model after the Works Bureau to adopt a two-envelop tendering system, under which the envelop in respect of quality should take precedence over that of tender price. HA should also encourage its contractors to employ more labourers who had passed the trade tests and adopt a more stringent approach to penalize non-performing contractors. PD(C) took note of the Chairman's views.

VI Funding support for demolition of Cottage Areas

Meeting with the Coalition on Safeguarding the Rights of Cottage Areas in Hong Kong
(LC Paper No. CB(1) 924/98-99(03) and 944/98-99)

23. At the invitation of the Chairman, Mr LEUNG Kwong-lam briefed members on the submission from the Coalition. He said that although residents of Cottage Areas (CAs) were not owners of the land, they built the structures at their own expenses. It was therefore not unreasonable for the Administration to compensate the residents concerned for the loss of the structure as a result of demolition of CAs. Mr LEUNG added that the ex-gratia allowance given to the former residents of Tiu Keng Leng Cottage Area (TKLCA) should similarly apply to all CA residents given their similar historical background.

Meeting with the Administration
(LC Paper No. CB(1) 924/98-99(04))

24. Before commencing discussion, the Deputy Secretary for Housing (1) (DS for H(1)) took the opportunity to clarify some of the points made by the Coalition. He said that subsequent to the discussion on the same subject at the Panel meeting on 7 December 1998, the Administration had solicited detailed advice from the Secretary for Justice on the issue of "compensation" to CA residents. Legal advice had confirmed that neither the Government or HA was legally liable to pay any "compensation" to these residents since they had no legal title to the land. As regards TKLCA, DS for H (1) emphasized that this was a very special case because the then Commissioner for Resettlement had promised the residents concerned that they could reside in TKLCA indefinitely. Therefore, eligible TKLCA residents should be compensated for damages on their loss of opportunity to reside in the area and to continue to enjoy the low rentals associated with such residence. DS for H (1) added that although CA residents had erected or purchased the structures at their own expenses, there was no express provision in any legislation that they would be compensated for the loss of the structures upon clearance. Nevertheless, in recognition of the distinct historical background of CAs, the Administration was prepared to offer relaxed re-housing arrangements to residents living in CAs as opposed to those in Temporary Housing Areas (THAs) and squatter areas. Genuine CA residents registered by the Housing Department (HD) before 10 September 1998 would be accorded first priority green form status in the purchase of Home Ownership Scheme/Private Sector Participation Scheme flats; exempted from the income-cum-asset test for admission to PRH; and given the opportunity to purchase flats under the Buy-or-Rent Option at discounted prices with mortgage subsidies.

25. Members were not convinced of the Administration's explanation. While acknowledging that CA residents had no legal title to the land, Dr YEUNG Sum pointed out that the land was designated by the Government to the residents for erection of structures as an interim accommodation before PRH was made available. Therefore, unlike squatters, they were legal occupants of the land and should be compensated for the loss of the structures upon clearance. Mr LEE Cheuk-yan supplemented that as the sale of CA structures had to be approved by HD, buyers concerned should be compensated for damages on demolition of their structures. BD/A&M responded that apart from CAs, the Government had also designated land to the resettled households for erecting structures in the then Resettlement Areas. Similar case was also in THAs. No compensation had been offered to the households concerned when the structures were demolished upon clearances. Given that the sale of structures was common as in the case of squatter structures, DS for H (1) did not agree that this should constitute a ground for compensation. The Chairman however considered a direct comparison between CA and squatter areas inappropriate as the latter were not registered by HD. BD/A&M clarified that squatter structures which had already been in existence before 1 June 1982 were registered by HD. Squatters concerned were also ineligible for compensation upon clearance. The Chairman remained of the view that CAs were different from squatter areas. As to whether the Administration would consider providing ex-gratia allowance or the special allowance given to victims affected by flooding to CA residents, DS for H (1) advised that the latter would only be given on account of loss of income-earning assets.

26. Mr Edward HO questioned the difference between TKLCA and other CAs. He pointed out that the Administration's decision to offer ex-gratia allowance to TKLCA residents was not based on the confirmation that the residents concerned had indefinite right to reside in TKLCA. Similarly, CA residents would not need to prove their indefinite right to be eligible for ex-gratia allowance. DS for H (1) noted Mr HO's view and agreed to look into the matter of the provision of ex-gratia allowance again. He however remained of the view that it was inappropriate for the Government to use public funds to compensate CA residents given that the preferential re-housing arrangements provided for these residents would already involve substantial resources. Members remarked that the re-housing arrangements were no better than those offered to applicants on WL. Mr SZETO Wah added that the exemption from income-cum-asset test was not a preferential treatment since most of CA residents could pass such a test. Ms CHAN Yuen-han opined that the Administration should make a decision on compensation for CA residents as soon as possible in view of the impending demolition of the Fu Man and Pok Oi CAs. Mr CHENG Kai-nam also pointed out that CA residents would be reluctant to repair their structures if they were uncertain of the Administration's decision. In reply, DS for H (1) emphasized that he did not want to create any false hope for CA residents but he assured members that the Administration would examine the issue of granting ex-gratia allowance to CA residents in the light of legal advice as well as members' views and would report the outcome to the Panel in due course. Meanwhile, the Administration would withhold the funding proposal.Admin

27. The Chairman urged that in considering the issue of compensation, emphasis should be put on the special circumstances of CAs rather than on the legal perspective.

VII Any other business

Sales Description of Uncompleted Residential Properties Bill
(LC Paper No. CB(1) 919/98-99)

28. Ms CHAN Yuen-han asked how the proposed legislation could eliminate misleading information in the sales brochures regarding vacant land around the development. The Principal Assistant Secretary for Housing (1) advised the Bill stipulated that a sales brochure should contain a location plan showing the relevant development and its adjacent areas. The plan should cover major communal facilities and the land use of the surroundings of the development known to the developer. Any misrepresentation would be liable to penalties under the proposed legislation. DS for H (1) also took note of the respective suggestions of Messrs CHENG Kai-nam and Edward HO that developers should be required to use actual scene rather than artistic scene of the development in the sales brochure, and that the arrangement of the furniture within a flat in a sales brochure should be drawn to scale.

29. Mr HO expressed concern on the various technical and practical difficulties in measuring the "internal floor area" accurately. According to the Bill, internal floor area referred to the area contained within the external walls of a property but included all internal partitions and columns within the unit. However, there might be circumstances under which an external wall had to be combined with a column giving rise to a thicker external load bearing wall. The actual thickness of walls would be affected by factors such as fittings, finishes and workmanship. In addition, it was not uncommon that in a high-rise building, the external walls were thicker in the lower floors than that in the higher floors. DS for H (1) advised that the Administration had consulted the Hong Kong Institute of Surveyors which indicated that the definition on "internal floor area" as drafted was acceptable. Members agreed to discuss the technical issues of the Bill in detail after the formation of the relevant Bills Committee.

30. There being no other business, the meeting ended at 7:15 pm.

Legislative Council Secretariat
4 June 1999