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(a) Water syndicate operators. These, and others who

have taken advantage of the conditions in the Walled City to conduct activities that would not be allowed elsewhere in Hong Kong, are another potentially difficult group. They may be considered for compensation for their capital investment in, for example, wells and equipment. The Special Committee may also wish to recommend some compensation for loss of business (but would be unlikely to offer this at the start of negotiations).

Special Committee of the Housing Authority

5.

Because of the special problems involved, a Special Committee of the Housing Authority will be formed specifically to deal with this clearance. It will be chaired by a

non-official and will have a membership comprising other suitably qualified non-officials (including some with local connections) and four official members from the main Government Departments. The tasks of the Special Committee will be:

(a)

(b)

(c)

to set down guidelines for compensation and clearance, based upon the flexible arrangements applicable to redevelopment clearances;

to consider the particular problems arising from the Walled City clearance, including difficulties of determining compensation and rehousing entitlements;

to receive and consider representations from those with grievances arising out of the clearance.

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(J. D. I. Boyd) Political Adviser

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Qiaozonghai

SECRET

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