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In delivering the 2009-10 Budget on February 26, Financial Secretary John Tsang announced, among other things, the HK$700-million Operation Building Bright to help owners of about 1,000 derelict buildings in old districts maintain them. The plan is part and parcel of his endeavors to preserve or create jobs.

Launched in collaboration with the Housing Society (HS) and Urban Renewal Authority (URA), it is esimtated that Operation Building Bright will create 10,000 job opportunities in the next two years, including construction and maintenance jobs as well as related professional and technical positions.

In an exclusive interview with China Daily, Housing Society chairman Yeung Ka-sing says unemployment in the construction sector is very severe following the downturn in the property market.

In recent years, many Hong Kong construction workers sought their fortunes in neighboring Macao, where a large number of infrastructure projects, including residential developments, hotels and casinos were being built. Since Macao developers offered high wages to get their projects completed as quickly as possible, as many as 10,000 Hong Kong construction workers went to work in Macao in the last couple of years.

However, as Macao's tourism and gaming sectors began to decline, many projects were stopped and a great many construction workers were left out of work.

Many workers then returned to Hong Kong, but the local construction sector suffered the same fate as the global financial tsunami began to wreak havoc on Hong Kong.

"The property sector remains the dominant force of the economy in Hong Kong. If the property market deteriorates, developers will stop building and selling and so the number of unemployed construction workers will constitute a very large proportion of the total number of unemployed people in Hong Kong," said Yeung. "Although the government is going to launch the 10 major infrastructure projects, they take longer time for planning and cannot offer immediate job openings. The refurbishment of old buildings can do so."

Yeung said that as part of Operation Building Bright, the HS and URA would each identify 500 target buildings and offer their owners one-off financial and technical assistance to carry out necessary repairs. Total funds for the operation is HK$1 billion, with the government putting up HK$700 million and the HS and URA providing HK$150 million each.

"We will only subsidize the owners to carry out repair works in the common areas of the target buildings relating to improvement of building structural safety and sanitary facilities such as replacement of defective soil, waste, rainwater, vent pipes and underground drainage," he said. "We will also subsidize owners who have received orders from the Buildings Department to remove illegal structures from their buildings. In the older years, illegal structures were very common but today many of the senile owners do not have money to pay for removal of illegal structures and will therefore need to seek our help."

The grant also covers electricity improvement works and fire services installations because aging electrical wires are a common cause of fires. He said several decades ago, the electrical capacity in buildings was rather small as it was only designed to accommodate simple electrical appliances. But today the proliferation of appliances such as fridges, washing machines, television sets and air-conditioners often exceeds the capacity of the electrical transformers.

"It is time for the owners to hire qualified technicians to check their electrical appliances and fire services installations as owners are required by law to install fire-fighting equipment in their buildings," Yeung said. "Although the grant does not cover indoor repair works, we hope owners will take this opportunity to carry out minor indoor works of cement and painting works and installation of steel window frames at their own expenses as long as scaffoldings are erected for execution of external works. Dong so, they can improve the quality of their buildings and create more jobs for the workers."

Yeung said that the prime objective of the operation is to create a large number of job opportunities for the construction industry, particularly decoration and maintenance workers, within a short period of time.

"We estimate HS and URA will together create about 10,000 job opportunities in the next two years, with 80 percent of them being workers and the rest being professional and technical people. The HS will need to hire 30 more staff to handle this operation, such as Authorized Persons to approve the applications and prepare tenders for the repair works," he said. "Without the need to go through asset or means tests, owners of buildings will be entitled to grants equivalent to 80 percent of the cost of repair, subject to a ceiling of HK$16,000. Owners who are aged 60 or above and occupy the buildings for self-use are entitled to the repair costs in full capped at HK$40,000."

The operation can begin in as early as next month (May) once funding is approved by the Legislative Council Finance Committee at the end of this month, he said.

For the time being, the HS and URA are doing some preparatory work such as publicizing the campaign and answering enquiries from the owners. The appli cation period will last for one month only, so owners must be quick to take advantage of this opportunity.

Wong Kit-lung, chief executive officer of the Housing Society, said staff will do site visits after they have received applications from owners for fund grants to see if the repair works are justified and whether to approve projects. If the application for a grant is approved, the HS will provide the owners a list of Authorized Persons for them to appoint one to prepare tenders.

"The HS will be fully involved from the early stage of commencement of works to works supervision and completion," he said. Upon satisfactory completion of a project, the HS will release payment to the owners for onward payment to the contractors.

The HS will take on board precautionary measures to prevent abuse, fraud and malpractice.

"The most common irregularities cover: inflated quotations, unnecessary works, and inferior quality of works and materials," he said. "From our experience, most of the owners were innocent and had no knowledge of works, thus giving some dishonest contractors the chance to exaggerate the cost of repair.

"In one case, the owner applied for HK$20,000 but we only approved HK$12,000 after checking the quotation, but neither the owner nor contractor dared to say a word."

Yeung also knows of a case in which a syndicate bought a unit in a target building hoping to receive a subsidy for repairs from the government.

The HS will also work closely with the Independent Commission Against Corruption to ensure the tendering procedures are fair, honest and corruption-free.

Calling on owners to participate in the plan, Yeung said the government spends a huge amount of money in non-recurrent expenditures to help the owners for two reasons.

"First, many of the building owners in the old districts are senior citizens who bought their properties in the 1960s but they have no money now to maintain the buildings. Second, the government encourages owners to remove illegal structures to ensure structural safety of the buildings.

"The government defrays a very large part of the repair cost but the owners still need to bear a certain portion of the cost. It is their own responsibility to maintain their own buildings and they shall not pass the responsibility to the government. The amount of subsidy is very reasonable and it is only the severe unemployment that prompts the launch of this special operation."

Housing Society archive photos show the contrast of an old building before renovation (above) and after renovation (below)

(HK Edition 04/17/2009 page2)