The current-term Government is determined to address the housing supply-demand imbalance by increasing land supply. We need to put up residential sites for sale in a sustained and steady manner to cater for the housing needs of those who are not eligible for subsidised housing, and to give potential home buyers a clear anticipation of future housing supply so that they need not make hasty decisions.
Although we have duly assessed various technical feasibilities and possible impacts on the community before putting up each site up for tender, we still encounter judicial review applications filed by some people from time to time; and are often criticised for “blindly grabbing land”, “venting our spleen” and selling cheap land that will possibly be or is presently subject to judicial review. I have to clarify in response to these unfounded allegations or criticisms.
Some people questioned about the inconsistency in the Government’s land sale mechanism, referring to the unsuccessful tendering of two residential sites in November last year and January this year respectively but a recent award of tender for a residential site in Tai Po. My answer is simple: “Absolutely not the case”. As I have reiterated repeatedly, the current-term Government does not have a high land premium policy, nor does it sell land cheap. Our land sale mechanism has been objective, independent and effective over time. Before each land sale, a team of professional surveyors from the Lands Department (LandsD) will conduct professional valuation and set a reserve price for the site on the tender closing date, taking into account the latest market conditions, relevant site conditions, the Conditions of Sale and other factors that may affect the development of the site. No other government officials can interfere with the pricing process. The site will not be sold to safeguard public revenue if the tender bids received are lower than the reserve price; on the contrary, if the tender bids are up to or above the reserve price, the site will be awarded to the highest bidder after the vetting of the Central Tender Board to ensure fairness. We have all along been strictly adhering to this established mechanism, which has been vetted by the Independent Commission Against Corruption. The awarding of land tender is not based on the subjective will of individual officials.
Colleagues of the LandsD continue to monitor the market conditions closely and make a professional assessment of land value. Every time when the Government puts up a site for tender, the media normally quote different valuations made by various stakeholders in the “market”. There may be a considerable difference between the upper and lower limits of these valuations. Yet, the actual bidding prices submitted by developers from time to time fall beyond the estimated upper and lower limits as quoted by the media. Therefore, it is not surprising to see discrepancies in the value of a site estimated by the Government, developers, and other stakeholders in the market. As for the two aforementioned sites the tenders of which were unsuccessful, the respective bids received by the Government were below the lower limits of the “market valuations” quoted by the media as well as the Government’s reserve price. In order to safeguard public revenue, these two sites were not awarded. It is wrong therefore, to infer that the Government has a high land premium policy merely because of the unsuccessful tendering of the two sites. Likewise, the recent award of tender for a residential site in Tai Po does not imply that the Government is selling land cheap. Rather, it reflects that the Government’s valuation was in line with the latest market development and relevant site conditions, and same bids received were higher than the Government’s reserve price. As always, the Government upholds a land sale mechanism that is fair and consistent.
Some individuals are of the view that the Government should suspend the sale of sites that are involved in judicial reviews, or delay their sale until the completion of their respective court proceedings, in order to minimise the impact on land valuation. The Government does not agree.
From the perspective of risk management, the risks associated with each site differ. For example, there are sites with slopes nearby that have to be maintained, while some others may be facing the risks of judicial reviews. Taking into account the conditions of each site, the Government has to consider whether it would be more efficient and appropriate for the market or the Government to deal with the risks. Past experiences show that both approaches have their own merits, and the market is usually capable of and willing to deal with the risks. To suspend the sale of sites that may face the risk of judicial reviews across the board is not only unnecessary, but it may also deal a major blow to the sustained and steady supply of land. Take a recent case in the New Territories West as an example: an applicant, dissatisfied with the rezoning of some sites, applied for judicial review in February last year against the relevant Outline Zoning Plan (OZP). The applicant withdrew the application recently. If the Government suspended the sale of a specific site whenever a judicial review application was filed, the six sites on that OZP (involving about 3 900 flats) could not be made available to the market in 2015-16 as scheduled. Furthermore, announcing the suspension of sale for such sites across the board will most likely set a bad precedent, whereby some individuals, regardless of their ulterior motives, may manipulate judicial review opportunities to hinder the Government’s timely supply of land to meet the pressing needs of the public.
In this regard, judicial review has far-reaching impacts on land supply. The Government must act prudently. Having regard to the circumstances of individual sites and bearing in mind the public interest, the Government will continue to put up land for sale by tender in a prudent manner after seeking legal advice and ascertaining the legal basis.
Land supply is a matter concerning the well-being of Hong Kong people. The Government must make responsible decisions with courage. Such decisions may not be easy and would not be risk free, but I believe they are in the best interest of the public.
21 February, 2016
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