XN000022-1996-06-05 — Page 27

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Despite the efforts made, it is unlikely that we will be able to clear all outstanding Letters A/B commitments. The wording of the Letters A/B is open-ended as regards the date of redemption. Moreover, we have no way of knowing when the untraceable Letters A/B may surface and their owners seek to redeem them. These untraceable Letters A/B may remain outstanding for a long period of time and Government would not be able to ascertain when it would be called upon to fulfil its commitments to provide land. It is not possible for Government to make land available in each year's Land Disposal Programme to await for such redemption. In any case, it is not feasible for Government to continue to provide land to redeem the residual untraceable commitments which are likely to be held in small packets. We consider that the best way to completely resolve the question is by way of legislation.

The purpose of the New Territories Land Exchange Entitlements (Redemption) Bill is to make the land exchange entitlements redeemable for cash only rather than land after an appointed date. We will make available in the current financial year sufficient land to redeem the known outstanding entitlements. The new legislation is therefore likely to apply only to those entitlements which are untraceable and likely to be held in such small packets as to make the provision of land for redemption impracticable.

Under the Bill, an owner of a land exchange entitlement may lodge his claim for redemption with the Director of Lands in a specified form. He is required to furnish the Director with any required particulars or evidence in support of his claim.

Redemption money shall be payable by the Director to the owners in proportion to their respective shares in the legal ownership of the land exchange entitlement, at the rates set out in the Schedule to the Bill. The scheduled rates are the most recent values published in the Gazette in respect of land exchange entitlements.

We propose that any redemption money payable shall bear interest from the commencement date of the proposed legislation until the date of payment. The rate of interest payable shall be at the lowest rate payable from time to time by note-issuing banks on deposit at 24 hours' call.

The Director may, as a condition of making payment of redemption money and interest to a claimant, require the latter to surrender all or some of the documents furnished to the Director in support of his claim. The Director may also require the claimant to execute an indemnity in favour of the Director in respect of any payment made and of all liabilities, losses, costs, charges and expenses incurred by the Director by reason of or in respect of the payment. This is to enable the Government to seek refund and to recover losses from the claimant in case of fraudulent claims.