FRIDAY, APRIL 28, 1978
IN ADDITION, MISS CHUNG SAID, FOUR OTHER CRITERIA MUST BE SATISFIED:
THE SCHEME MUST BE REASONABLY SIMPLE TO OPERATE=
(11) GOVERNMENT MUST BE ABLE TO SELECT DEVELOPERS ON A
COMPETITIVE BASIS, EITHER THROUGH THE PUBLIC AUCTION OR TENDER SYSTEM=
(ITI) THE CHOSEN DEVELOPER SHOULD BE GIVEN A REASONABLE DEAL,
BUT SHOULD NOT BE ENTIRELY ABSOLVED FROM NORMAL COMMERCIAL RISKS AND
(IV) THE OPPORTUNITY COST TO GOVERNMENT OR LESS THAN
MAXIMISATION OF REVENUE SHOULD NOT BE EXCESSIVE.
+ AM HAPPY TO SAY THAT A SCHEME MEETING THESE CRITERIA HAS BEEN WORKED OUT,+ MISS CHUNG SAID.
OUTLINING THE SCHEME, MISS CHUNG SAID GOVERNMENT WOULD PROVIDE LAND ON WHICH DEVELOPERS WOULD SUBMIT DEVELOPMENT PROPOSALS AND TENDERS IN RESPECT OF THE RANGE AND SPECIFICATIONS OF FLATS TO BE BUILT AND THE LAND PREMIUM FOR THE SITE IN QUESTION.
·
THE SALE PRICE PER SQUARE FOOT OF THE FLATS WOULD BE FIXED AT THE OUTSET BY THE GOVERNMENT, WHICH WOULD ALSO GUARANTEE THAT ALL FLATS WILL BE SOLD.
+SALE PRICES MUST BE FIXED BEFOREHAND BECAUSE ANY ARRANGEMENT THAT ALLOWS PRICE FLUCTUATIONS EITHER TO MEET COST ESCALATION OR TO MAINTAIN A CERTAIN PROFIT MARGIN WOULD TEND TO FRUSTRATE THE WHOLE PURPOSE OF PRODUCING FLATS WITHIN THE DEBT SERVICING ABILITY OF THE TARGET INCOME GROUP,+ MISS CHUNG SAID.
+TO COMPENSATE FOR THE FACT THAT FLATS WILL BE SOLD AT PRICES FIXED BY GOVERNMENT, IT HAS BEEN DECIDED TO ABSOLVE THE DEVELOPER OF THE NEED TO FIND PURCHASERS FOR HIS FLATS,+
THIS WAS DONE BY WAY OF GUARANTEE THAT ALL FLATS WOULD BE BOUGHT EITHER BY ELIGIBLE BUYERS NOMINATED BY THE HOUSING AUTHORITY OR BY GOVERNMENT ITSELF.
+THIS GUARANTEE HAS OBVIOUS ATTRACTION TO DEVELOPERS, WHOSE MAIN HEADACHE IS THE CYCLICAL SWING OF THE MARKET, WHILE IT INVOLVES LITTLE RISK FOR GOVERNMENT IF IT IS FAIRLY CERTAIN OF THE DEMAND FROM ELIGIBLE BUYERS AND IF THE FLATS ARE SUITABLE IN ALL RESPECTS FOR SALE AND PURCHASE.+
MISS CHUNG SAID SAFEGUARDS AGAINST UNDER-DEVELOPMENT OF SITE, POOR STANDARD OF WORKMANSHIP AND MANAGEMENT AFTER COMPLETION WERE CONSIDERED NECESSARY. THESE WERE THAT:
(1) THE LAND AUTHORITIES WOULD DETERMINE THE MAXIMUM
PERMITTED DEVELOPMENT IN RESPECT OF THE SITES AND THE HOUSING DEPARTMENT ADVISE ON A SCALE OF DESIRED ACCOMMODATION AND STANDARDS AGAINST WHICH TENDERS COULD BE ASSESSED-
/(II)