XN000022-1980-12-17 — Page 10

WEDNESDAY, DECEMBER 17, 1980

+ADDED TO THESE PHYSICAL PROBLEMS WAS THE GENERAL SHORTAGE OF SKILLED LABOUR AND BUILDING MATERIALS, WHICH AFFECTED THE INDUSTRY GENERALLY DURING THE PERIODS OF THESE CONTRACTS.

+THESE DIFFICULTIES WERE COMPOUNDED BY INCREASES IN LABOUR AND MATERIAL COSTS SINCE THE AWARD OF THE CONTRACTS WHICH WERE NOT FULLY COVERED BY PRICE ESCALATION CLAUSES IN THE CONTRACTS, AND THEREFORE RESULTED IN FINANCIAL PROBLEMS FOR THE MAIN CONTRACTOR.+

MR LIAO SAID RE-ENTRY ON THE CONTRACTS HAD BEEN CONSIDERED BUT THIS WAS NOT DONE SINCE IT WOULD HAVE BROUGHT EVEN GREATER DELAYS,

ON THE SUBJECT OF POSSIBLE COMPENSATION TO PURCHASERS, RAISED BY THE HON LYDIA DUNN, MR LIAO SAID HOME OWNERSHIP SCHEME FLATS WERE SOLD AT COST AND THERE WAS NO PROVISION UNDER THE CONDITIONS OF SALE FOR ANY FORM OF COMPENSATION.

+THE PURCHASERS MAY DERIVE SOME SATISFACTION FROM THE KNOWLEDGE THAT THEIR FLATS WERE BOUGHT AT PRICES CONSIDERABLY BELOW CURRENT MARKET LEVELS, HE SAID.

HE POINTED OUT THAT THESE THREE PROJECTS WERE AMONG 65 MAJOR FOUNDATION AND BUILDING CONTRACTS CURRENTLY UNDER WAY AND THE OUTSTANDING WORK ON THE THREE CONTRACTS REPRESENTED JUST OVER TWO PER CENT OF THE 97 000 OR SO FLATS INVOLVED.

FINALLY, SAID MR LIAO, IN FUTURE HOME OWNERSHIP SCHEMES, FLATS WOULD NOT BE SOLD UNTIL MUCH CLOSER TO THE EXPECTED COMPLETION DATES.

+ IN THIS WAY IT WILL BE POSSIBLE TO GIVE SUCCESSFUL PURCHASERS A FAR MORE RELIABLE ESTIMATE OF WHEN THEIR FLATS WILL BE READY,+ HE SAID.

APPROPRIATE FOR GOVERNMENT TO PROTECT INSURANCE POLICY HOLDERS

*****

THE ACTING SECRETARY FOR ECONOMIC SERVICES, THE HON PIERS JACOBS SAID IN THE LEGISLATIVE COUNCIL TODAY THAT INSURANCE WAS AN AREA IN WHICH SOME DEGREE OF GOVERNMENT INTERVENTION WAS APPROPRIATE.

THIS IS BECAUSE A POLICY HOLDER IS RARELY IN A POSITION TO ASSESS THE FINANCIAL CAPABILITY OF THE COMPANY WHICH OFFERS HIM COVER, HE SAID,

SPEAKING AT THE SECOND READING OF THE FIRE AND MARINE INSURANCE COMPANIES DEPOSIT (AMENDMENT) BILL AND THE LIFE INSURANCE COMPANIES (AMENDMENT) BILL, MR JACOBS SAID IT WAS ESSENTIAL THAT POLICY HOLDERS SHOULD BE ABLE TO RELY UPON THE FINANCIAL STABILITY OF INSURANCE COMPANIES.

/+IN MANY

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