CONFIDENTIAL
機密
XCC(75)60
4
Nevertheless, confidence in the exchange system is low for two reasons: first, there is presently a serious shortage of developed land to implement exchanges and, secondly, the cash value allowed for the agricultural land to be surrendered has remained relatively unchanged almost since the inception of the sytem in 1960, while the value of developed land on which the premium is based has increased a 100-fold or more.
5
In 1974, a large area of land in Tsuen Wan was acquired for public housing and related projects. The land-owners made strong representations to the Secretary for the New Territories for a "reasonable" cash alternative to the system; similar and perhaps stronger reactions are being encountered in Sha Tin where very large areas are also being acquired. Resistance is increased by the awareness of New Territories land owners that Government has already introduced a system of en- hanced compensation payments in New Kowloon in similar circumstances. For these reasons, it is important that acceptable modifications should be made if the new towns development programme is not to meet with increasing dissatisfaction and resistance from land-owners.
6
In paragraph 16 of memorandum XCC(73)97, Honourable Members were advised that consideration was being given to offering to pay cash compensation on surrender amounting to a proportion of the value of the land when developed. On further examination it has been found extremely difficult to produce a formula which would be readily understood, and which would not produce unacceptable disparities between the rates of compensation payable for different resumptions. Consequently a formula is proposed, based on the present value of exchange rights in the open market, on the lines of the method now used in New Kowloon.
7
Exchange entitlements (Letters 'B') may be bought and sold. Because there is currently little land to exchange and a surfeit of exchange rights for sale, the sellers' price for new Letters 'B' over the last year has been around $10 a square foot. For this reason, the Secretary for the New Territories has advised that an overall payment of about $10 a square foot would be reasonable as cash com- pensation for agricultural land. This cash offer will afford an immediate realisation of the land assets surrendered and, as such, may be attractive to some land owners. Alternatively, land owners will be offered an exchange for the surrendered land with the enhanced value being de- ducted from the premium. (The figure of $10 compares with that of $15 payable in Kowloon for agricultural land), Adjustment of the surrender value will need to be made at intervals with reference to the state of the land market and the going value for exchange rights.
C.S. 166
CONFIDENTIAL #2
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