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LCQ12: Operation Building Bright

Following is a question by the Hon Lee Wing-tat and a written reply by the Secretary for Development, Mrs Carrie Lam, in the Legislative Council today (January 12):

Question:

Since 2009, the Government has, in collaboration with the Hong Kong Housing Society (HKHS) and the Urban Renewal Authority (URA), launched the $2.5-billion "Operation Building Bright" (the Operation) to help owners of old buildings to carry out repair and maintenance works.  In this connection, will the Government inform this Council:

(a)  of the respective numbers of applications the authorities have received in the first round of the Operation (application deadline fell on June 6, 2009) and the second round (application deadline fell on December 24, 2010) for Category 1 target buildings (i.e. buildings with owners' corporations (OCs) established); among the applications received in these two rounds, the respective numbers of those which meet the eligibility criteria or have not been withdrawn by the applicants, and the respective numbers of those which have been granted "approval-in-principle";

(b)  of the total number of buildings selected by the authorities as Category 2 target buildings under the Operation (i.e. buildings having difficulties in coordinating repair works, and with structural safety problems and defective sanitary facilities) as at the end of December 2010, and among these buildings, the number of those which need the Buildings Department to arrange their repair works, and the number of those for which the repair works have been organised/will be organised by the owners/OCs themselves;

(c)  of the total number of buildings involved in the cases under Category 1 and Category 2 target buildings in (a) and (b); as at to date, among these buildings, the respective numbers for which the repair works have been completed in the first and second rounds, are being carried out or are under preparation, and those the applications in respect of which are still being processed; among the approved cases, the largest, smallest and average amounts of grants for consultancy fees and for the works to be granted as estimated by the authorities, and the differences between such estimates and the original estimates as assessed by the authorities;

(d)  among the cases in (c) where repair works have been approved, of the respective numbers of Authorised Persons (APs) and contractors involved; the respective percentages of these numbers in the total numbers of APs and contractors in the market; among these APs and contractors, the respective numbers of those who have been included in the approved lists of HKHS or URA;

(e)  as at the end of December 2010, of the respective numbers of target buildings the applications in respect of which have been approved by HKHS and URA, and the consultancy fees and costs of works involved, the respective amounts of grants for repair works that have been released for target buildings by HKHS and URA, and the respective percentages of these amounts in the total fundings for HKHS and URA under the Operation; and

(f)  among the repair works that have been or are being carried out under the Operation, whether the authorities have identified any cases of suspected irregularities; if they have, of the number of such cases with a breakdown by type; the total number of such cases in which the authorities have issued notices and demanded rectifications; the number of such cases that have been referred to the Independent Commission Against Corruption for follow-up; and the number of OCs that have decided to terminate their contracts with the consultants involved in irregularities?

Reply:

President,

My reply to the six-part question is as follows:

(a)  A total of 1 128 applications for Category 1 target buildings have been received in the first round of the Operation Building Bright (the Operation).  Among which, 988 meet the eligibility criteria or have not been withdrawn, and have been granted "approvals-in-principle".

In the second round of the Operation, 550 applications have been received.  The implementation agencies of the Operation i.e. the Hong Kong Housing Society (HKHS) and the Urban Renewal Authority (URA) are conducting preliminary screening on the applications to see if they meet the basic eligibility criteria.

(b)  As at the end of December 2010, a total of 879 buildings were selected as Category 2 target buildings (i.e. buildings having difficulties in coordinating repair works, such as those without owners' corporations (OCs)).  Among which, 409 buildings have been confirmed requiring the Buildings Department (BD) to arrange repair works for them, and the owners or OCs of 163 buildings are organising repair works or have expressed that they would arrange repair works by themselves.   For the remaining buildings, the BD, the HKHS and the URA are continuing to consult the owners to see if they intend to carry out repair works by themselves.  If the owners concerned are unable to carry out repair works by themselves, the BD will arrange the repair works for them.

(c)  Among the 988 cases of Category 1 target buildings which have been granted "approvals-in-principle" in the first round of the Operation, 55 have basically completed their repair works and another 204 have commenced repair works.   For the remaining buildings, they are at different stages of work involving selection and appointment of authorised persons (APs), carrying out of building surveys, preparation of tender documents for the selection and appointment of contractors, etc.  Among these cases, it is preliminarily estimated that the highest, lowest and average amounts of grants (covering consultancy and works costs) for each building/case are around $8.9 million, $120,000 and $1.6 million respectively.  The average amount of grant is about 15% higher than the amount that we estimated for each building by sampling in mid-2010.  As mentioned in our reply in part (a), the HKHS and the URA are conducting preliminary screening to see if the applications submitted in the second round meet the basic eligibility criteria and therefore cannot accurately estimate the amounts of grants for Category 1 target buildings in the second round at this stage.

Among the Category 2 target buildings whose owners are unable to carry out repair works by themselves and need the BD to arrange repair works for them, 128 have basically completed their repair works and another 281 have commenced repair works.  It is preliminarily estimated that the highest, lowest and average amounts of grants are about $1.2 million, $20,000 and $220,000 respectively.  The average amount of grant is similar to the amount we estimated for each building by sampling in mid-2010.

As for Category 2 target buildings whose owners/OCs are willing to organise repair works by themselves, 19 have basically completed their repair works and another 35 have commenced repair works.  It is preliminarily estimated that the highest, lowest and average amounts of grants are about $4.2 million, $120,000 and $700,000 respectively.  The average amount of grant is about 40% higher than the amount we estimated for each building by sampling in mid-2010.

(d)  As for the 313 Category 1 and Category 2 target buildings whose owners/OCs are carrying out or have completed repair works by themselves, a total of 73 consultant companies with APs and 88 registered general building contractors (RGBCs) are involved, amounting to about 5% (assuming that each consultant company has only one AP) and 14% of the total numbers of APs on the Authorised Persons' Register and RGBCs on the General Building Contractors' Register of the BD respectively.  These figures also amount to 16% and 20% of the numbers of APs and RGBCs respectively who are interested in providing services in building repair and maintenance works.  63 consultant companies and 85 contractors involved in the Operation have also been included in the relevant registers of the HKHS.

(e)  As at the end of December 2010, the HKHS and URA scrutinised applications for grants from 643 and 450 target buildings and the grant amounts involved are about $1 billion and $630 million respectively.  The HKHS and URA have partially or fully released the grants to 26 and 40 buildings, involving about $10 million and $35 million respectively, amounting to about 3% of the total amount of grants involved in the cases already approved by the HKHS and the URA.

(f)  As at the end of December 2010, the HKHS and URA issued warning letters or reminders to a total of 35 cases of suspected non-compliance with the requirements of the Operation, requesting the persons concerned to rectify the irregularities.  A breakdown of the irregularities involved (some cases may involve more than one irregularity) is as follows:

Type    Number
----    ------

Cases suspected of failing
to comply with the requirements
set out in the Operation
Building Bright Maintenance
Guidelines or breaching the
conditions of relevant
professional services.   23

Cases suspected of
contravening the Building
Management Ordinance (Cap. 344)
or the requirements set out
in the code for procurement
of supplies, goods and
services.  3

Cases suspected of
unreasonable estimation
of the costs of works
and tender prices.  11

Among the cases mentioned above, 14 have been referred to the Independent Commission Against Corruption for information or follow-up actions.  In addition, 18 OCs have decided to terminate their contracts with the consultant companies which have committed irregularities and re-appointed new ones to proceed with their repair works.


Ends/Wednesday, January 12, 2011
Issued at HKT 14:31

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