New renovation body may offer bigger subsidies for ageing Hong Kong districts

Hong Kong’s planned renovation monitoring body will consider larger subsidies for homeowners of ageing buildings in older districts or with high elderly populations who use its supervision services for major repairs, the finance chief has said.

Financial Secretary Paul Chan Mo-po said on Saturday that the Building Maintenance Support and Services Council, set up to curb malpractice in the industry after the Tai Po fire report, would be non-profit but would have to recover its costs, since owners mainly bear responsibility for maintaining private residential property.

He said service charges would depend on factors such as the scope of the work, with fees estimated at several thousand Hong Kong dollars per household, but that authorities would subsidise those in need.

“In places with a high elderly population, and in older districts and ageing buildings, there’s no harm in offering a larger subsidy when appropriate,” he told a radio programme.

“The most important thing is to get this work done promptly to ensure everyone’s living environment is safe and comfortable. In this regard, if there is a further need for additional financial support, we are more than happy to provide it.”

On Thursday, authorities announced that the government would establish the council as part of the reforms following an independent committee’s report on the devastating blaze at Wang Fuk Court in Tai Po last November, which killed 168 people.

The report found that substandard materials used in the estate’s renovation at the time had contributed to the rapid spread of the fire, and that evidence showed “numerous features” of the project bore the hallmarks of bid-rigging and anticompetitive conduct.

The council will assign inspection consultants to property owners, handle tendering and assessments for supervision consultants and contractors, and regularly evaluate performance to uphold project quality.

Authorities said HK$300 million (US$38.24 million) had been earmarked for the initiative, comprising HK$100 million in start-up capital and HK$200 million in subsidies for homeowners.

Asked about the subsidy ratio, Chan said it would be inappropriate to set a uniform threshold and that flexibility was needed, given the varying scale of individual residential developments.

“There are some older buildings with a lot of elderly residents living in them. To encourage them to go ahead with it, and also because the risks there are even higher, if we offer a higher subsidy ratio for those cases, I believe everyone would be fine with that,” he said.

“In some districts that might be older but are still quite expensive, the homeowners there are relatively well-off. For those cases, providing professional support and guidance is more important than giving financial aid.”

Secretary for Development Bernadette Linn Hon-ho said on Saturday that about 650 applications had been received across the three pre-qualification lists for inspection consultants, supervision consultants and contractors.

The lists for inspection consultants and supervision consultants had each received about 150 applications, while the contractors’ list had received about 350.

“It is roughly two to three times higher than the previous lists. The figure shows that more people in the industry have stepped forward and are willing to submit for our pre-qualification, which is a positive sign,” she said.

“If more people take part and competition increases, coupled with our new council acting as a gatekeeper, I believe there will be much greater assurance regarding the reasonableness of prices for our future major renovation projects.”

She said she expected the council to recruit about 100 staff by the middle of next year, including professionals and administrative personnel.

Also as part of the reforms, the disgraced Independent Checking Unit (ICU), which the report identified as the government arm most responsible for the lack of oversight of Wang Fuk Court’s renovation, will be replaced by a new Public Housing Building Control Section.

Deputy Financial Secretary Michael Wong Wai-lun said the new body was not merely a renamed version of the unit but a drive for fundamental institutional reform to rectify past shortcomings.

He said a dedicated team would be established and a designated liaison officer assigned to each regulatory project to ensure all complaints were properly addressed.

He added that authorities had so far bought the ownership rights of nearly 95 per cent of Wang Fuk Court flats under the government buyout scheme.

The remaining ownership rights would be restored through legislative means next year, he said, but that process would not start yet because authorities were still handling acquisitions from some residents while others were choosing flats, to avoid sending mixed messages.