Secretary for Labour and Welfare Law Chi-kwong has said that the government’s plans to purchase property for new welfare facilities are not aimed at benefitting the private sector.

The annual budget issued on Wednesday proposed allocating HK$20 billion for the purchase of 60 private properties to accommodate over 130 new welfare facilities. The facilities will include day child care centres, neighbourhood elderly centres and on-site pre-school rehabilitation services, among others. The new centres are expected to benefit around 86,000 people.

Pro-democracy lawmakers have said that the government would be paying “sky high” prices of HK$300 million for each property. They questioned whether the proposal was about transferring funds to the private sphere – an idea rejected by Financial Secretary Paul Chan.

An event at the neighbourhood elderly centre. Photo: Yan Chai Hospital Fong Yock Yee Neighbourhood Elderly Centre.

Law said at a press conference on Thursday afternoon that, since the plan will be conducted over the span of three years, the government will only be buying 20 units per year.

He said the government will be looking for properties totalling around 40,000 square metres such as commercial buildings, malls, offices and renovated industrial buildings, amounting to around 0.1 per cent of Hong Kong’s commercial floor area. The government hoped to place the new facilities at similar locations in order to create a synergy effect.

“We don’t expect that it [will have] a high impact on the market,” he said. “If you think in terms of last year’s transactions of the type of premises we are thinking of, last year it was around 8,000.”

Law said the government has a procurement policy governed by Financial Services and the Treasury Bureau, and it has to follow rules of the Independent Commission Against Corruption.

“We have full confidence – when we are acquiring these units from the private sector, the existing rules and the prudence that we are going to take will ensure that there will be no sense of providing any ‘benefits’ to the private sector,” he said.

For instance, he said the headquarters of the Social Welfare Department is at Wu Chung House, originally a private development. “Somehow, we don’t think that is a problem,” he said.

Law Chi-kwong. Photo: RTHK Screenshot.

Law said the government will be asking for a lump sum of HK$20 billion, instead of seeking separate funds for each property. The government currently did not have a list of properties to buy, and may ultimately purchase more than 60 properties.

“We will first need to go to [the legislature’s] Panel on Welfare Services, then the Finance Committee. It may take six to nine months – any suitable site may not be available anymore,” he said. “We also need enough flexibility to make decisions based on the market situation.”

He said purchasing the properties would be a better option than renting, but would not rule out the idea: “For some groups, it is important to have stable sites for them.”

But they will not buy existing properties that were previously elderly and disabled people’s homes, because of size, ventilation and legal requirements, among other issues.

Law also said it would be very unlikely that the government would buy properties owned by Link Real Estate Investment Trust, which owns a large number of previously publicly-owned housing estate malls.

Kris Cheng

Kris Cheng is a Hong Kong journalist with an interest in local politics. His work has been featured in Washington Post, Public Radio International, Hong Kong Economic Times and others. He has a BSSc in Sociology from the Chinese University of Hong Kong. Kris is HKFP's Editorial Director.