Progress on the Initiatives to Revitalise Industrial Buildings

The package of new measures came into operation on 1 April 2010 and Lands Department (LandsD) has set up a dedicated team at its headquarters to centrally process all redevelopment and wholesale conversion applications. By end September 2010, LandsD had received 29 applications under the new initiatives for redevelopment (6) and wholesale conversion (23) of industrial buildings.

We have set a three-year application period for the new measures.  As undertaken earlier, we will conduct a mid-term review in the coming year to ensure that the new initiatives will promote more efficient use of the existing industrial premises to meet the changing social and economic needs of Hong Kong.

Land Supply

With a view to increasing land supply for private housing, we will continue to uphold the Application List as the main axle and supplement it by Government-initiated land sales by auction or tender. Moreover, we will review existing land uses or explore new land resources. For example, we have completed a review of industrial land in the territory and propose to rezone about 30 hectares of it for residential use. We have also lowered the threshold for compulsory land sale for redevelopment to facilitate the redevelopment of more old buildings. In the medium to longer term, the development of the Kai Tak Development Area and other new development areas in the northern New Territories will provide more land to meet housing needs. Planning studies will also commence shortly in respect of quarry sites at Anderson Road, Lam Tei and Lamma Island to see if they can provide land for residential use. We will also work towards commencing as soon as possible the feasibility study for the proposed further development of Tung Chung, upon finalization of the detailed planning of the related infrastructure projects of the Hong Kong-Zhuhai-Macao Bridge.

It is the Government's policy to ensure a healthy and stable development of the property market. To this end, in the next 10 years, on average land needs to be made available annually for some 20 000 private residential flats. As underlined by the CE, this is not a fixed target for residential flat production. Our aim is to build up a sufficient large land reserve over a period of time to ensure stable land supply for the residential property market. In particular, we need to make available sufficient land for building small and medium residential flats to keep their prices stable. The private housing land supply includes government land to be disposed of, lease modifications and land exchanges initiated by private developers, private redevelopment projects not subject to premium payment, as well as land tenders carried out by the MTR Corporation Limited (MTRCL) and Urban Renewal Authority (URA).

To achieve the above-mentioned objective, the Financial Secretary will chair a “Steering Committee on Housing Land Supply” to coordinate the efforts of the departments concerned. This will ensure that issues relating to housing land will be dealt with as a matter of priority so as to ensure a stable and adequate supply of such land.

In order to increase the supply of mass market flats, we have earmarked the ex-Yuen Long Estate site for constructing such flats through specifying the minimum number of flats and the unit size restrictions in the land sale conditions. We are preparing to sell the site by tender later this year. In the light of the experience gained, we will explore applying this arrangement to other sites.

Furthermore, we will discuss with MTRCL and URA on the provision of more small and medium flats in their residential developments along the West Rail and urban renewal projects respectively.

Hong Kong's population and development needs were met over the decades through harbour reclamation and leveling of hills. We have pledged to do no more reclamation within the Victoria Harbour upon completion of the final reclamation at Central and Wan Chai for construction of the Central and Wan Chai Bypass. To generate more land in the long run, we will consult the public on the proposal for reclamation on an appropriate scale outside Victoria Harbour. Separately, the Civil Engineering and Development Department is conducting a study on the use of underground space in Hong Kong. Although cavern and underground space are not suitable for housing, they can provide land for other competitive uses like public and storage facilities.

Government Expenditure on Infrastructure Projects

The spending performance of the Capital Works Programme (CWP) in 2010-11 is satisfactory, and we expect to meet in full the original estimate of about $49.6 billion. This is a marked improvement from the actual expenditure of $23.4 billion in 2008-09 and a further increase from the spending of $45.3 billion in 2009-10.

We are pressing ahead with various major infrastructure projects under our portfolio. For the Kai Tak Development (Kp), a dedicated Kai Tak Office was established in March 2010 to lead and oversee the co-ordination and implementation of all Kp-related projects. Currently, construction of the first-phase development, including public rental housing, the cruise terminal building-cum-first berth, and the supporting infrastructure, is in full swing and is scheduled for completion in mid-2013. To take forward the implementation of other development in Kai Tak, the detailed design for the infrastructure works at the north apron, together with the bio-remediation works at Kai Tak Approach Channel, is underway. We will also continue with the public engagement exercises for the Lung Tsun Stone Bridge Remnants and the Kai Tak River in early 2011.

On the Lok Ma Chau Loop (the Loop), the Hong Kong and Shenzhen Governments have commissioned a joint planning and engineering study in June 2009. The Study is to explore the feasibility of developing the Loop with higher education as the leading land use, to be complemented with hi-tech R&D facilities as well as cultural and creative industries on the basis of mutual benefits. We aim to complete the Study in 2012.

On New Development Areas (NDA), we have commenced the Planning & Engineering Study for the North East New Territories (NENT) NDA (Kwu Tung North, Fanling North and Ping Che/Ta Kwu Ling). The NENT NDA will provide land to meet the long term housing need and other land use requirements in the future. It is expected that the Study will be completed in 2011. Preparatory work for the commencement of the Planning & Engineering Study for the Hung Shui Kiu (HSK) NDA in 2011 is also being undertaken.

In regard to the Liantang/Heung Yuen Wai Boundary Control Point project, construction of a resite area for Chuk Yuen Village affected by the project started in August 2010 as scheduled. The investigation and preliminary design will be substantially completed in end 2010. Detailed design of the civil engineering works will commence, subject to funding approval.

We have also made good progress on other major projects which will help improve our living environment, including the three drainage tunnel projects on Hong Kong Island, Tsuen Wan and Lai Chi Kok; and the improvement works under Stages 1, 2 and 3 of Replacement and Rehabilitation (R&R) of Watermains Programme.

Job Creation

In addition to the major capital works projects, we are pressing ahead with the minor works in order to create more jobs for the construction industry. With these efforts and building maintenance works under the Operation Building Bright, the unemployment rate of the construction sector fell from a peak of 12.8% in the period from February to April 2009 to 7.0% in June to August 2010, representing a cumulative decrease of 5.8%. We expect that with the annual capital works expenditure continuing to stay at a high level in excess of $50 billion in the next few years, more jobs will be created for the construction industry.

Manpower Supply in the Construction Industry

DEVB and the Construction Industry Council (CIC) have completed studies to forecast the construction manpower supply situation of the industry at the professional, supervisory and worker level in the coming years and recommend manpower strategies and measures to better deal with the future construction manpower demand. The finding of the studies indicate that while no major problem is anticipated in most construction-related professional disciplines, the labour workforce is facing an ageing and skill mismatch problem and supervisors will be in high demand.

In view of the rising demand for construction manpower in the next few years, we need to maintain an adequate manpower supply and enhance the skills and competitiveness of the existing workforce. To this end, we have obtained the approval of the Finance Committee of the Legislative Council for a one-off allocation of $100 million. The bulk will be used to support the CIC to enhance the training and trade testing for prospective fresh blood and local in-service construction personnel, and to provide trainees attending CIC’s adult short courses and construction supervisor/technician courses with an enhanced training allowance. This will help train up a multi-skilled construction workforce to enhance the mobility and competitiveness of workers for serving varying future needs. DEVB will use the remaining fund to enhance promotion and publicity activities, in conjunction with CIC and other stakeholders, to attract more people to join the construction industry.

We will continue to work in collaboration with the CIC and industry stakeholders to assess the effectiveness of the above measures and closely monitor the manpower demand and supply situation. For trades with acute manpower shortage, consideration will be given to include suitable provisions in public works contracts encouraging contractors to adopt a mechanized method of construction.