Speeches
Speech by Mr.LEUNG Chin-man, Director of Housing, at Meeting of the Housing Authority (Thursday, 26 June 2003)
Chairman, Members and Fellow Colleagues,
I would like to thank all Members for attending today's meeting. Two weeks ago, at the first Annual Special Meeting of the year, various Members stated their views and expectations of the work of the Housing Department (HD). Today, I want to take this opportunity to report on the challenges ahead and our plans for the future.
SUCCESSFUL REORGANIZATION OF HA
2. Firstly, let me sum up the major work completed in the last year. With the implementation of the Principal Officials Accountability System and adoption of the reforms on the institutional framework for public housing, we have successfully merged the Housing Bureau with the Housing Department and formed a new organization under the name of "Housing Department". Meanwhile, we have also adopted the proposals put up in the Report on the Review of the Institutional Framework for Public Housing (RIFPH). The Housing Ordinance was amended to facilitate the appointment of the Principal Official responsible for housing, i.e. Mr Michael SUEN, the Secretary for Housing, Planning and Lands, as chairman of the Housing Authority (HA) on 1 April. We believe that this change will enhance the efficiency of the Government in the formulation and implementation of housing policies and provide timely response on the expectations of the community.
3. More importantly, we will continue to draw in talents from different sectors of the community to bring their insight and experience into the discussion forum of the HA on the formulation of future housing policies. By now, we have completed the major reorganization of the HA. Today, a galaxy of talent gathers in this room, forming an ideal team for the HA.
IMPLEMENTATION OF THE STATEMENT ON HOUSING POLICY
4. Last November, the Secretary for Housing, Planning and Lands announced the Statement on Housing Policy. The Statement clarified the role of the Government in the property market and confirmed that the thrust of Government¡¦s subsidized housing policy should be to assist low-income families that cannot afford private rental housing. On this basis, a number of other measures, directly related to the work of the HA were also announced, including the cessation of the production of Home Ownership Scheme (HOS) flats and the suspension of the sale of HOS and Tenants Purchase Scheme (TPS) flats. In future, the Government will minimize as far as possible any intervention in the property market to allow greater freedom for the market to operate.
5. Throughout the years, in formulating specific initiatives on housing policies, Members have contributed a lot of valuable opinion. Although our views differ at times, we have in common an impregnable vision to do our best in providing accommodation to those in need. This cause unites us and we will join hands to do our best for the benefit of the public and the community.
6. In the past few months, all walks of life in Hong Kong have suffered substantially as a result of the outbreak of Atypical Pneumonia. The property market was inevitably affected, too. Recently, the epidemic has basically been brought under control and the market is reviving. We believe that if we persist with the current housing policies and adopt a liberal approach to allow the free operation of the market, it will gradually recover when the economic and employment situations improve and public confidence is restored.
FOCUS OF OUR WORK IN FUTURE
Estate Cleansing
7. During the peak of the spread of Atypical Pneumonia in the past three months, our front-line staff kept to their posts and worked with dedication round the clock to contain the spread of the virus in our public housing estates. I have nothing but praise for their performance.
8. However, the outbreak of the epidemic also exposed the hygiene problem that has long been overlooked in our society. The rampant spread of the disease in the community made the public realize that a good living environment helps protect our lives and our mental and physical health. Therefore, we need to look critically at the effectiveness of our work in environmental hygiene and estate maintenance.
9. On environmental hygiene, many Members have made pertinent remarks on the long-standing problems in the management of our estates. As members of the department, we are duty-bound to provide better services in keeping our estates clean and in good repair. Enhanced cleanliness in our estates depends, not only on concerted efforts by the estate management staff, but more importantly, on the cultivation of the consciousness in environmental hygiene among the residents and commercial tenants of public housing estates. I am sure that only through the cooperation of residents, commercial tenants and estate management staff can we make a fundamental change, in the areas where we have neither done enough nor well over the years.
10. Specifically, we have formulated 18 measures after holding discussions with Members, community leaders and representatives of residents and commercial tenants of public housing estates. These measures include undertaking drainage inspections of selected public housing units and follow-ups of the necessary repair works. Also, we have drawn up a long-term plan for inspections of drains located in common areas outside public housing units every six months by technical and professional staff.
11. To encourage the participation of the whole community, we will mobilize estate mutual-aid committees to organize regular "Clean Tai Ping Tei" operations in order to promote estate cleanliness among residents. Moreover, the implementation of an award scheme, which commends outstanding cleaners in our shopping centers, is also one of our initiatives.
12. On the marking scheme, I fully understand Members' concern on the need to establish clearly the fine details to avoid ambiguity, confusion and unnecessary confrontations before its implementation in August. I can assure you that my colleagues are now working on the details. Publicity campaigns will be launched before its full implementation so as to help the residents familiarize themselves with the details. Besides, we will send letters to tenants on the marking scheme. If possible, outreaching service will be employed to inform elderly tenants of the new scheme and provide them with assistance.
13. I assure you that the cleansing campaign is a move, which is carried out after careful and serious consideration. To align with the Team Clean objectives spearheaded by the Chief Secretary for Administration, we will be resolute and decisive in order to maintain a healthy and hygienic environment.
Improvement of Estate Management
14. Drawing on lessons associated with the outbreak of Atypical Pneumonia, a number of Members have proposed that the management of estates should be strengthened, and that improvement is particularly necessary to address the grey areas. In this regard, we have reached a consensus with other government departments. When we encounter difficulties in taking enforcement actions, apart from appealing to the public for their cooperation, we will also seek assistance from other government departments, such as the Police, the Food and Environmental Hygiene Department and the Social Welfare Department where necessary in order to achieve effective enforcement.
15. In addition, some Members have raised concern on the inadequacies of the property services companies in fulfilling their supervisory functions and discharging their duties. To ensure the quality of services provided by outsourcing management companies, HD has formulated guidelines and performance indicators for these companies. Their performance is also closely monitored. In fact, we have set up a dedicated team to inspect the performance of outsourcing management companies. We make regular as well as surprise checks to assess the quality of their services on the basis of an objective scoring system.
16. At the last meeting, Mr CHAN Bing-woon pointed out the need for professional estate management services across the territory to minimize the risks of the spread of contagious diseases among the public. He further advocated the setting up of a register for qualified property management agencies to promote professionalism in estate management and the placing of property management under the jurisdiction of a single government authority, instead of the existing arrangement whereby various departments such as the Home Affairs Department, the Buildings Department, the Lands Department and the Architectural Services Department are involved. This is a good proposal. However, as this touches upon the work of a number of bureaux and departments, detailed consideration is required. Let me assure Mr CHAN that in relation to public housing management, the professional services provided by us are all under HA¡¦s supervision, and the problem of lack of co-ordination does not exist. HA will continue to be the sole supervisory authority over public housing management.
Maximizing the Use of Resources to Generate Income and Reduce Expenditure
17. Quite a number of Members have raised concern over HA¡¦s financial situation, given the cessation of the sale of HOS and the need to finance a substantial public housing development programme. I must admit that I have similar concerns. As Members are fully aware, the proceeds from the sale of HOS have been one of the major sources of our income, given that the rents we charge can only barely cover day-to-day management and maintenance costs. For the time being, we will continue to maximize the use of our resources to generate income and reduce expenditure. For instance, we are considering to divest HA¡¦s commercial centres and carparking facilities to increase income. Concerning the financial arrangements between HA and the Government, we will continue to negotiate the details with colleagues of the Financial Services and the Treasury Bureau to ensure that there are adequate resources for HA to roll out its major initiatives in respect of the provision of subsidized rental housing and improvements in PRH tenants¡¦ living environment.
18. On expenditure, this year we will incur extra expenses in the continuing provision of additional cleansing operations for our estates, the upgrading of drains and the implementation of various other cleansing initiatives. This cannot be avoided. The 3-months' rent concession to our commercial tenants due to the outbreak of Atypical Pneumonia has also affected HA's income.
19. On the increase in revenue and income, HD is studying the proposal of divestment of HA's retail and carparking facilities. Divestment will help us cash in on our resources and tide us over this difficult period. We are still carefully studying the plan and will submit our findings to HA for approval at a later stage.
20. We will also explore other means of increasing our income, such as actively promoting the placement of advertisements in HA's shopping centres. Mr George NG Sze-fuk has suggested that vacant shop premises be subdivided into small units for rental purpose. In fact, this has already been implemented in Ming Tak Shopping Centre and Sui Wo Court. We will continue to adopt means to attract more potential tenants when the opportunities arise.
21. The Business Opportunity Centre set up since August 2002 provides flexible one-stop letting services for prospective business operators by helping the small investors with limited capital to identify suitable premises for setting up their own businesses. Since the establishment of the Business Opportunity Centre we have not only provided business opportunities for more than 1 000 people, but have also generated additional income for HA.
22. Professor LAU, Mr NG Shui-lai and Mr Walter CHAN have rightly pointed out that our objective is to provide housing for the needy. Therefore, we have the responsibility to ensure that the limited housing resources are fairly distributed. We consider that although much administration work will be required in tenancy investigation matters, we need to adhere to the principle that valuable public housing resources should only be provided to those in genuine need and the allocation policy will be formulated on such a basis.
23. Mr Chairman, we will continue to look at and explore other possible means of increasing income and cutting down expenditure in a systematic manner in the hope of generating additional income and achieving more savings so as to enable HA to continue its efficient operation in serving the community.
Building Quality
24. During the past few years, we have concentrated on timely production of public housing to meet housing targets. Now is the time for use to review the design of public rental housing. We will adopt "functional and cost-effective" designs so as to achieve maximum cost-effectiveness. The aim is to design well and build smart and to provide safe, simple and comfortable public housing for those in need.
25. The outbreak of Atypical Pneumonia has highlighted the relationship between building designs / environmental factors with the spreading of diseases. Three years ago, HD has already carried out computer simulations of the effect of microclimate on certain building projects. Computer technology was employed to calculate the effect of wind direction, ventilation, sunshine duration, energy efficiency, noise pollution, etc. The data so collected have been used as reference in designing our public housing. In the meantime, micro-climatic research is being carried out in seven of our public housing projects under planning. The environmental effects of these designs will be assessed against the criteria set down by the Hong Kong BEAM.
26. In planning and designing our new public housing estates, we will ensure the provision of good environment, green areas as well as natural air ventilation so as to enhance environmental protection. Besides, we will consider installation of sewage pipes outside housing units, and easy maintenance will also be a factor of consideration.
Reform of the Culture of the Construction Industry
27. The Hon SIN Chung-kai and Mr. CHENG Yan-kee have referred to the First Report of the Legislative Council Select Committee on Building Problems of Public Housing Units. The Report put forward many useful opinions and recommendations on how to improve the construction processes of public housing in major areas such as procurement arrangements, site supervision, organizational structure, project management, culture of the construction industry and staff discipline. We fully agree with those opinions and recommendations, and the contents of the Report are much in line with the direction of HA's reform.
28. In recent years, we have been working hard to implement a series of initiatives to revamp the system of public housing construction and to nurture a quality-oriented culture in the industry. Currently, we are implementing part of the recommendations of the Select Committee to further enhance construction management, and the progress in institutional reform and project management is particularly noticeable. We will continue to implement the outstanding recommendations, and we are grateful for Members' recognition and support of the direction of our work.
Quality Assurance System
29. Over the years, many Members have put forward a lot of pertinent and useful opinions on the reform of HD¡¦s quality management system. In this respect, HD's Construction Division has introduced a quality assurance system based on the 2000 version of ISO 9000. The updated system focuses on results rather than procedures. It is highly flexible, and encourages professional judgment and reduces emphasis on form filling. The new system has only been recently implemented and I would look to Members to allow HD time to test out the system and weigh its pros and cons before conducting a review at a later stage.
Establishment of a Review Mechanism for Contractors
30. Ms Teresa CHENG Yeuk-wah proposed the setting up of a formal forum for contractors to put forth their views and submissions in cases of disagreement on performance assessment and listing management. To facilitate a thorough understanding of the disputes, the Department supports the establishment of a review mechanism to handle the complaints lodged by contractors when required.
31. According to the preliminary proposal, individual committees will be able to assign suitable Members to hear presentations of the Department and the contractors for cases of appeal and handle the contractors¡¦ complaints properly. To speed up the resolution process, HD has also adopted other measures to resolve disputes, which include the setting up of a Steering Committee on Claims and Disputes, the introduction of a dispute resolution mechanism in which disputes over trial contracts will be handled by consultants, and the establishment of a summary trial procedure. HD will study Members' proposals in detail and will submit plans to the Building Committee for consideration in order to handle disputes over contracts of works in the best possible way.
Improvement of the Tendering System
32. Through continuous improvement in the procurement arrangements, HA does not only enhance the cost-effectiveness, but also gives due consideration to the quality of services and past performance of contractors. In principle, we disregard exceptionally low bids when assessing the tenders. With regard to the selection of building contractors and building services contractors, instead of awarding contracts to the lowest tender, we have adopted the Preferential Tender Award System under which the past performance of contractors will affect the scoring. After gaining sufficient experience and information, we will extend the system to cover tenders for foundation works.
33. With the reduction in housing production, we are mindful that we should ensure a fair distribution of work within the industry. I am grateful to Mr. CHENG Yan-kee for raising this issue and would like to respond that the capping limits for our contractors will be reviewed to provide a more realistic reflection of the current circumstances of the industry.
Review of the Organisation Structure of HD
34. Lastly, I would like to report on the outcome of the reform of HD's framework. In conducting the related review, we have taken into account factors such as the Statement on Housing Policy announced in November 2002, the proposed divestment of HA's retail and car-parking facilities (Note 1), and the modifications needed to cope with the changes in service requirements and modes of delivery. We have critically reviewed the existing establishment of HD to identify areas where there is scope to merge or delete lines of responsibilities which are diminishing due to changes in policy or service. In developing the new structure, we have been mindful of the need to address potential surplus staff issues, and have taken into account natural wastage arising from normal retirement, departure under the Voluntary Departure Scheme (Note 2) (VDS) and the second Voluntary Retirement Scheme, and completion of contracts of employees on contract terms.
35. We have largely completed our work in phase one and have formulated certain proposals on HD's senior management structure to downsize its establishment. We have already commenced work in phase two, and we plan to finalise our proposals for both phases after consultation with staff before the end of 2003.
36. Specifically, between now and 31 March 2007, and assuming that the divestment of HA's retail and car-parking facilities will be completed by 2006/07, we plan to make a net deletion of 27 directorate posts in total, including 2 deputy director posts, 9 assistant director posts and 16 chief manager/professional posts. The number of business divisions will be reduced from 6 to 4 and that of sub-divisions from 22 to 15.
37. As I have mentioned above, we will consult staff on our preliminary proposals and finalise the proposals for both directorate and non-directorate structures before the end of 2003. I am sure our departmental colleagues will work in a pragmatic manner to meet the challenges positively and continue to serve the public.
CONCLUSION
38. Mr Chairman, we have undergone a lot of changes in the past year. With our concerted efforts, we have also accomplished a good many tasks: re-organisation of HA, implementation of the initiatives proposed in the Statement on Housing Policy and the race in time against the spread of Atypical Pneumonia in keeping estate environment healthy and safeguarding the personal safety and property of the public. All these have made up an unforgettable and touching episode in the brevity of the past year.
39. In the months ahead, we will have a great deal to do: to improve estate management; to carry out cleansing and maintenance work in estates; and to address the package of issues relating to construction quality and cost. Moreover, our Department has made a big step forward in the path of organisational reform. HA's finances are yet another issue we need to handle with great care and resolve. I know the practical problems facing us are complicated and formidable. We must pull together our greatest courage and perseverance to work hand in hand with departmental colleagues to map out the course of implementation. Of course, we will also need guidance and advice from the Chairman and Members to help us achieve our mission.
40. Thank you.
Note 1:
In the Policy Agenda published in January 2003, the Housing, Planning and Lands Bureau announced that it would evaluate options for the divestment of the HA's retail and car-parking facilities with a view to developing an implementation plan. We are actively taking the matter forward and aim to complete the divestment before the end of 2006-07. The result of the study will be put forward to HA for endorsement in due course.
Note 2:
The VDS was devised to facilitate the out-sourcing by phases of the management and maintenance of public housing estates to the private sector.
