Welcome speech by URA Chairman, Mr Victor So, at the URA “Bringing Innovations to Urban Renewal” International Conference
Good morning, ladies and gentlemen, our Guest of Honour, the Honourable Mr John Tsang, Financial Secretary of the HKSAR Government,
It gives me great pleasure to welcome you all to our conference "Bringing Innovations to Urban Renewal" and on the occasion of our 15th Anniversary.
For the tedious urban regeneration process, 15 years is neither too long or too short a period. In fact, both our predecessor, the Land Development Corporation (LDC), ourselves and our counterparts in the private sector have been fighting together this problem of urban plight for over three decades or even more. And the URA, as a public organisation, would also need to shoulder the additional burden of social responsibilities during the process.
Earlier on and under the LDC, we largely adopted the '3P', that is the Public-Private Participation model, in redeveloping larger and more difficult projects. However, we encountered stronger-than-expected resistance and objections from the affected owners and residents, and more importantly, from those illegal occupancies. As a result, many of our projects suffered a delay of 10 years or even more, and private sectors' interests in this kind of 3P model is diminishing or has diminished to a big extent.
In the late 90's, our Government concluded and I quote, "the LDC would not be able to deliver urban renewal on a sufficient scale and quickly enough to avoid long term urban decay without new operating mechanisms and increased support from Government", unquote.
Subsequently, with a capital injection of HK$10 billion from our Government and under the URA Ordinance, the URA was formed, taking over the work left by the LDC. And this time around, the Government's increased support is that they won't charge us land premiums. On the other hand, we have to run our own business on a self-financing basis over the long term.
In order to speed up at least a vital part of the urban renewal process, the URA would acquire and clear the identified urban renewal projects first. And then we would invite joint venture partners from the private sector through a tender process.
Due to the higher-than-market prices and compensation that we must pay to the affected parties under the law, we would normally suffer heavy mark-to-market losses on a number of these projects. Fortunately, arising from the very unprecedented market boom over the past decade, we were still able to share surplus sale proceeds from our joint venture partners in some of those earlier projects that we started. As such, that's why our financial status remains healthy.
On record, of the 69 projects that we are now handling with close to 30% of these being completed, we have been able to provide a total of 1.3 million square metres and over 650,000 square metres of residential and commercial floorspace respectively, over 3½ hectares of public open space, and you just figure it out it is about 12 football pitches for our community and that is something that we are very proud of. And in addition, we also provided 75,000 square metres of GIC Facilities as our major contribution to our society.
Through our internal resources, we also provide subsidies to qualified buildings for repair and maintenance and act to restore and revitalise some older buildings and areas. We have so far helped 2,400 old buildings in this regard. This forms the 4Rs of our business model i.e. Redevelopment, Rehabilitation, pReservation and Revitalisation.
Going forward, the entire landscape of urban renewal is facing many major changes and challenges such as rising construction costs, falling project tender prices, the inability to raise the existing plot ratio of some of the older areas and the like - not to mention the growing expectations from our residents and our politicians.
As a forward looking and dynamic organisation, the URA has always been asking if we have acted as "quickly" or "sufficiently" as expected at the beginning. In our recent exercise on a small district-based redevelopment concept, which was just announced a few days ago, we believe we could bring in more planning and social gains for the benefit of the neighborhood which should outweigh the higher costs and even losses to be incurred. This could also fulfill many of the objectives stated in the Urban Renewal Strategy that guides the work of the URA. Likewise, instead of 'slash and burn', the retrofit of some of the older but structurally sound buildings could well be another better and less capital intensive option.
Urban decay is moving at a very fast pace, much faster than our efforts to redevelop or rehabilitate our older districts. Status quo is definitely not an option. We should therefore not just 'think outside the box' but need to secure major breakthroughs for bringing more innovations and new means to our urban renewal mission in the years to come.
That is why we are so glad in our conference today, we shall learn from the world-renowned intellect and practitioner in city planning and regeneration, Dr. Liu Thai Ker, the first Chief Executive Officer and Chief Planner of Singapore Urban Redevelopment Authority. We also have experts on how to renew and restore our old cities from around the world, including the Mainland which you will hear that they do have very good examples.
I hope we can all benefit from today's conference and I conclude by thanking you all for coming.