The Housing Authority's (HA) financial position will remain sound in the coming years, said the chairman of its finance committee. Despite projected decreases in the cash and investment balance, it has sufficient resources to meet the policy objectives and construction targets.

Following the release of this year's budget, chairman of the authority's finance committee, Raymond So, said its bank balance would decline from HK$65.9 billion this year to less than HK$45.7 billion by 2016-2017. Nevertheless, So said the authority's financial position would remain sound in the coming years through the exercise of vigilance and prudent financial control.

The Housing Authority Finance Committee on Friday approved the authority's 2013-14 draft budget, which has yet to be endorsed by the plenary meeting.

However, speaking to the press after the meeting, So said the authority has sufficient resources to meet the policy objectives and construction targets. He said the HA will strive to maintain the pledge to keep the waiting period for public rental housing to no more than three years, by building an average of 15,000 units per year from 2012-13 to 2016-17 over five consecutive years.

To complement the government's plan to resume construction under the Home Ownership Scheme (HOS), the HA will provide a total of 17,000 units during a four-year spell starting from 2016-17. The HA also plans to sell about 800 surplus HOS flats in early 2013.

The HA recorded a consolidated surplus of HK$3.435 billion for 2012-13 versus the original estimate of HK$4.21 billion, he said. Owing to the resumption of HOS flats, increases for building material prices and repair and maintenance costs, the surplus is projected to fall to HK$3.03 billion in 2016-17 on the assumption that public rents remain unchanged.

So disclosed that greater focus will be shifted to local investment portfolios owing to volatilities in international markets, adding the HA is eyeing a comparatively moderate, stable rate of return of 5 percent per year.

"The HA's mid and short term financial position remains steady," he said, explaining that the decreased income during the year was due to the waiver of public housing rents in September and the rebate of rates to the tenants. A 5.5 percent increase in building material costs is projected for the year ahead.

"We have no new building targets. We have confidence in meeting the current building targets, including 15,000 rental units per year at the same time as maintaining fiscal prudence," he said in response to questions asking whether the government wants to build more rental housing units and whether the government needs to make further injections into the HA.

However, So said rental adjustments are made only in accordance with the Housing Ordinance and have nothing to do with the financial position of the HA.

He said the projected cash balance level of HK$45.7 billion by 2017 is far from alarming. In 2004-05 after the SARS crisis, the cash balance dropped to HK$14.9 billion but the HA had got through those difficult times.

Chan Kin-por, a member of the HA Finance Committee and a lawmaker, agreed with So that the HA is under pressure in view of the immense building targets. "It depends on whether Chief Executive CY Leung will announce in his Policy Address to build more public rental units," he said. "But the HA can cope for the time being, because the government does not have sufficient lands and it takes a few years to turn the 'raw lands' into 'ripe lands'."

joseph@chinadailyhk.com

(HK Edition 01/05/2013 page1)