Government has indicated that it will be able to meet the capital needs of the Authority in the foreseeable future.
31. Loans to finance housing schemes are granted by Government when the projects are approved in principle: so far the following have. been granted:
(i) $33,000,000 for the North Point Estate.
(ii) $ 7,500,000 for Sai Wan Chuen (Cadogan Street Estate). (iii) $50,000,000 for the So Uk Estate.
32. In addition a loan of $1 million was made by Government when the Authority was first constituted, to meet administrative expenses during the period when an organization and staff were being set up, and building operations initiated in other words to 'prime the pump'. It was not intended that recurrent expenditure would continue to be met from this loan once rental income accrued, and expenditure from it is capitalized within the various schemes as they mature. The policy of the Authority has been directed, in accordance with the Housing Ordin- ance, to securing that in any period of three successive years after 1st April, 1956, its revenue shall be sufficient to meet all its outgoings, other than those chargeable to capital expenditure accounts, and this aim has been achieved.
33. Overhead expenses are charged against the various projects as they proceed, roughly in proportion to the number of tenancies, and the capital cost, involved. For instance, this is 15% for the North Point Estate, 5% for Sai Wan Chuen, and 25% for the So Uk Estate.
34. The North Point, Sai Wan Chuen, and Administration Loans were all made with interest payable at the rate of 31% per annum (calculated on maximum indebtedness during each month, and com- pounded half yearly in March and September). In October 1955, however, Government notified the Authority that for all future schemes, i.e. from So Uk onwards, the interest on loans would be at the rate of 5% per annum.
35. The Authority therefore decided that to avoid any difficulty, rents on all estates should be calculated on the same basis. Rents are fixed by calculating the direct annual expenditure and charges on each estate, and then assessing a standard rental, which gives a basic rent per flat, adjusted in detail according to relative quality, position and size of the flat. Income arising from shops (of which there will be some on most estates) is credited to a contingency reserve.
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