TNAG-0806-FCO40-1011-Policy-of-Government-of-Hong-Kong-on-land-in-the-New-Territo-1979 — Page 139

3.3.4

(iv)

3.3.5

(v)

4.1

5

exchanges involving recently dated entitlements that the Crown has obtained an "conomic return on the land it has made available. In general, most land now being exchanged under this system involves old Letters and hence extremely low premia. We do not foresee this situation changing for some considerable time as there remains a very large reservoir of old Letters.

There is currently so much outstanding exchange entitlement that there appears to be little prospect of recently dated "Letters" being accepted for exchange for many years. With the quickening pace of new towns development, there is a flood of new "Letters" being issued which will inevitably become less and less useful for exchange purposes.

It has been said that the holder of the Letter B always has the option to surrender it to the Crown for its face value. However, in our opinion, the effect of general inflation prevents this from being a truely viable option except for a very short period after the resumption.

The Abandonment of the Special Acquisition Land System

There is at the present time little land being made available by Government for exchange purposes. Indeed there does not appear to be a sufficient supply to absorb the outstanding Letters B. In these circumstances, we consider that this system contributes little to the development of the New Territories. The one situation where perhaps it is of use is in making up deficiencies in surrender land within minor layouts where Letter B surrender would be uneconomic. However, we see no reason why such deficiency should not be made up by cash premium.

The Basis of Calculating Compensation should be open market Value

5.1

The Institution believes that Hong Kong's present system of land acquisition and compensation is unsatisfactory and requires amendment.

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