ENG-1989 — Page 215

HOUSING

178

million. This deficit was due to the fact that the low rents in old estates were insufficient to cover management expenses and the high cost of maintenance and improvements. The authority was partly able to offset this deficit from the income derived from its commercial properties which, in the same period, generated a surplus of $297.6 million after paying the interest on permanent government capital and 50 per cent dividends to the government.

The authority spent $5,787.8 million on its capital programmes, of which $2,922.2 million (50.5 per cent) was financed by the authority, while the balance of $2,865.6 million (49.5 per cent) came from the government through the transfer of the closing balance as at March 31, 1989 of the Home Ownership Fund and supplementary capital injection.

Construction

The Housing Authority achieved yet another record, completing over 54 000 flats in 1989, well above the all time high record of 41 000 flats in 1988.

Despite the exceptional output, the shortage of skilled labour continued to be a serious problem affecting the progress of work on most of the building sites, so much so that the authority's ability to meet its future commitments under the Long Term Housing Strategy may be adversely affected in terms of both quantity and quality. However, the authority has introduced several positive measures to counteract the problem.

One measure will require the production off-site of some of the major components for the three new residential block designs, the Harmony blocks, which were developed last -year. This will help reduce the need for skilled labour on-site and will also require tight

quality control to be exercised in the manufacturing process.

Tenders for the first Harmony blocks were invited in October 1989. Arrangements for the bulk purchase of the building components were being finalised and selection of the suppliers will be made in 1990.

To further the aim of achieving good, consistent construction quality against a reasonable and realistic specification for a fair price, the authority intends to set up its own List of Building Contractors. It is believed that a group of contractors dedicated to the authority's work will complement the design and construction philosophy of the Harmony range, as it will optimise the benefits to be gained from standardisation, while contractors and their workforces quickly become familiar with the buildings. Applications for inclusion in the list were invited at the end of 1989, and it is hoped that a tentative list will be published early in 1990.

Efforts have also been made by the authority to help the construction industry to attract more workers to join and remain in the trade. Suggestions put forward by the authority to improve the safety standards and working conditions on-site were examined by the Hong Kong Construction Association. It is also hoped that the setting up of the authority's List of Building Contractors will quicken the pace in this direction.

Overall, the authority remains firmly committed to producing 230 000 flats in the first five-year development period from 1985 to 1990, and 215 000 flats and 135 000 flats in the second and third five-year development periods. During the year, 19 building contracts, with a total value of $3,530 million, were awarded. With the present rate of production and the normal seven-year lead time required before new flats can be let or sold, more new housing sites will be urgently needed to meet the projected demand in 1996 and after. This is a matter of great concern to the authority. No effort has been spared by the authority and the government departments concerned in resolving this problem, and hopefully by 1990 the requisite new sites will be determined for inclusion in the authority's housing programme.