No_6_1956 — Page 35

12.6

CO-OPERATIVE BUILDING SOCIETIES

There are many obvious manifesta- ing schemes, which may be summaris- tions of Government's contribution ed as follows:-

towards the alleviation of the housing shortage in Hong Kong. The building of new apartment blocks since the wat for the housing of expatriate officers of every grade, added to the older buildings, rehabilitated or purchased since 1947, makes an impressive total of quarters provided for these officers.

More spectacular are the resettle- ment blocks, built and paid for out of Government funds, for the housing of hundreds of thousands of refugees. Government's contributions to the building of low cost housing directly, through the Housing Authority, and indirectly, through the Hong Kong Housing Society and the Model Hous- ing Society, for the benefit of low paid workers and clerical assistants, almost equally impressive.

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Less well-known, however, is the contribution that the Hong Kong Government is making for the benefit of local employees on the Permanent and Pensionable Establishment. Assis- tance to this class of worthy and responsible Colony resident is being rendered in the form of loans made to Co-operative Building Societies regis- tered under the Co-operative Societies Ordinance, comprising groups of in- dividuals who join together to assume the responsibility for, and obtain the benefit of, the assistance that Govern- ment is prepared to give.

This assistance is two-fold, a loan to cover the cost of construction re- payable in 20 years at 31% interest, and the granting of land at half the upset price.

To ensure that the privileges granted by Government are not abused in any way, stringent conditions are imposed which include the prohibition of the sale of flats by individuals, and full acceptance of the financial, legal and moral responsibility involved in the occupation of a co-operative flat.

Ownership of a co-operative flat remains vested with the member after his retirement from Government ser- vice, and in his legal heirs after his death. He is, however, permitted to resign at any time, in which case his capital investment to that period is returned to him.

Government has laid down certain financial and building procedures for the development of co-operative build-

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I.

FINANCIAL PROCEDURE

General

(a) It is agreed that there should be 2.

as few Building Co-operatives as possible and that for purposes of control, loans should only be made to co-operatives on the basis of a loan for each project.

(b) All loans will be for 20 years at

31% Simple Interest.

Payments by Government

(a) The Co-operative will be advised by Government of the approximate

amount of loan funds which could be made available.

(b) On approval by Government of the

programme and expenditure estim ate for a project, a loan agreement between Government and the Co- operative for the estimated total cost will be signed.

(c) As security for the payment of the loan, the building or buildings in respect of which the loan is made will be mortgaged to Gov-

ernment.

(d) Once the loan agreement has been signed the Co-operative will carry out the programme in accordance with "Building Procedure.”

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(e) If the loan proves, to have been underestimated by the Co-operative the deficit will have to be made good by the Co-operative from its own resources unless there are good 5. grounds for an increase in the loan from Government.

(f) Once the loan agreement has been signed the Accountant General will pay all bills in respect of the project.

(g) All bills will be certified by the 6.

Chairman and Secretary of the Co- operative and submitted to the Treasury for payment. Repayment of Loans

(a) The repayment of a loan will be by equal annual instalments of capital together with interest at 31% on the reducing balance. (b) For

the

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Architect or Architects, select the site (a list of available sites, prepared by Crown Lands Office, will be supplied to each Cooperative), and instruct the Architects to prepare sketch designs for each site.

The following will be submitted to Government for approval of the use of the total funds allocated:

(a) Building programme in priority

sequence.

(b) Cost of land for each scheme. (c) Cost of site formation for each

scheme.

(d) Building cost for each scheme. (e) Cost per flat inclusive of land, site formation, building, Architects' fees and any other capital expen- diture, for each scheme. (f) Sketch design showing plans, elevations and site formation for each scheme.

(g) A list of officers qualifying for and willing to participate in each scheme, including total income (basic plus C.L.A.).

When the programme and details re- quired in paragraph 2 above are ap- proved in whole or in part, the Co- operative will purchase the land for any approved scheme and instruct the: Architect

the submit plans to Building Authority for approval under the Buildings Ordinance.

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If substantial site formation works are required the Architect will proceed in the first instance with the necessary drawings to enable him to call for tenders for this work.

After plan is approved by Building Authority, the Architect should pro- ceed with full working drawings and specifications for the building work. The Conditions of Contract, Specifica- tions and drawings must be sufficient- ly detailed for

proper competitive tenders to be called.

The Architect will call for tenders which will be submitted by Contrac- tors direct to the Chairman of the Tender Board.

Expenditure by the Cooperative at various stages of the process pur. chase of land, site formation, archi- tect's fees, contractor's bills etc. will be met by Accountant General.

As a result of the assistance given purpose of collecting monthly payments from individual to co-operative building societies, a members, the Co-operative will be Government employee can obtain ex- required to maintain an account cellent living quarters in new, up-to- with an approved Bank. Govern- date buildings, at a monthly cost of recovery of monthly instalments between $85 to $500 per month, due to Co-operatives by individual depending upon the type of accom- modation, which sum represents the monthly repayment per flat for capital and interest over 20 years. In addition in accordance with the wishes of to this, he pays a small monthly members eligible on points for first amount towards a Sinking Fund and flats, the Cooperative will appoint an Maintenance Account and, of course,

ment cannot be responsible for the

members.

BUILDING PROCEDURE

Within limits of funds allocated and

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