Following is a question by the Hon Jimmy Ng and a written reply by the Acting Secretary for Development, Mr Liu Chun-san, in the Legislative Council today (May 23):
 
Question:

     According to the findings of a consultancy study entitled Review of Land Requirement for Grade A Offices, Business and Industrial Uses, commissioned by the Planning Department, there will be shortfalls of respectively 8.9, 53.6 and 17.4 hectares in lands for Central Business District (CBD) Grade A Offices, Industries and Special Industries uses in the long term (up to 2041), among which the shortfall in lands for industrial uses being the most acute. However, there will be surpluses of respectively 10.5 and 32.3 hectares of lands for non-CBD Grade A office and general business uses over the same period. Regarding measures to boost the supply of industrial lands, will the Government inform this Council:
 
(1) given that some industrial buildings have been converted into or redeveloped one by one for non-industrial uses in recent years, whether the authorities have other supply of new industrial lands apart from the new sources of supply from Hung Shui Kiu New Development Area, Yuen Long South and Stonecutters Island, and have planned for more industrial areas to increase the supply of industrial lands, so as to tie in with the re-industrialisation policy actively promoted by the Government in recent years; if so, of the details, including (i) the geographical distribution of such industrial lands, (ii) the relevant work schedules, and (iii) the total area of industrial lands expected to be provided; if not, the reasons for that;
 
(2) whether the authorities will consider converting the lands for non-CBD Grade A office and general business uses, which will be in surplus, into lands for CBD Grade A Offices, Industrial and Special Industrial uses; if so, of the details; if not, the reasons for that;
 
(3) given that in view of the increase in labour costs on the Mainland, the continued appreciation of Renminbi against Hong Kong dollars, and the Hong Kong Government's determination to vigorously promote innovation and technology in recent years, quite a number of Hong Kong manufacturers who have set up factories on the Mainland intend to relocate their high value-added manufacturing processes back to Hong Kong, whether the authorities will review and revise the definition of "industrial use", so as to increase the supply of industrial lands; if so, of the details, and whether they will plan afresh the industrial lands in the territory in accordance with the new definition of industrial use, so as to encourage manufacturers to return to Hong Kong and promote the development of Hong Kong industries; and
 
(4) as I have learnt that although owners of private lots may apply to the Lands Department for lease modification or short term waiver in order to change the uses of the lots concerned to uses not permitted under the leases, the time taken for the vetting and approval of such applications is quite long and several government departments are involved, whether the authorities will consider setting up a dedicated inter-departmental taskforce to handle such applications, so as to enhance the efficiency of the vetting and approval process; if so, of the details; if not, the reasons for that?
 
Reply:
 
President,

     To facilitate the update of the territorial development strategy for Hong Kong under the "Hong Kong 2030+: Towards A Planning Vision and Strategy Transcending 2030", the Planning Department completed a consultancy study titled "Review of Land Requirement for Grade A Offices, Business and Industrial Uses" in 2017. The review covered a broad land supply and demand forecast of five market-driven economic uses (i.e. Central Business District (CBD) Grade A Office, Non-CBD Grade A Office, General Business, Industry and Special Industry) and anticipated that there would be shortfalls in the land for CBD Grade A Office, Industry and Special Industry uses in the short, medium and long term.

     The aforesaid broad land supply and demand forecast only reflected the known situation at the time when the estimation was made. Given that land use planning is an on-going process, and that the changing Hong Kong's domestic economy and external economic environment will affect the demand for each type of economic land, the Government will assess timely the latest land requirement for different uses and facilities (including industrial use) and appropriate conceptual spatial planning strategies. This will help meet the projected demand and provide space for the sustainable development of Hong Kong’s diversified economy.
 
I respond to the different parts of the question as follows:
 
(1) To sustain Hong Kong's competitiveness and seize new development opportunities, the Government will continue to put up industrial sites for sale in order to increase the supply. In the years 2016-17 and 2017-18, we sold three industrial sites (two in Kwai Chung and one in Tsuen Wan) providing a total gross floor area (GFA) of about 70 700 square metres. Early this month, we sold a logistics site in Tuen Mun, which provides a GFA of about 79 000 sq m. The Government will put up an industrial site in Fanling for sale in the first quarter of 2018-19 to provide a GFA of about 18 300 sq m. The Government will continue to earmark industrial land in existing and proposed development projects.

     Besides, according to the Innovation and Technology Bureau (ITB), the Government's policy objective of "re-industrialisation" is to develop high-end and less land-intensive manufacturing based on new technologies and smart production, thereby seeking a new edge for our economy growth. To meet the "re-industrialisation" policy and innovation and technology (I&T) development, the Government has reserved land of suitable size for industrial estates and I&T-related development. These sites are zoned "Other Specified Uses" (OU) annotated "Industrial Estate", "Research and Development" and "Business and Technology" zones, etc. The Government will continue to review the demand for I&T land from time to time to meet the development of relevant industries.
 
(2) General Business uses are mainly located in existing industrial buildings/industrial-office (I-O) buildings, followed by Non-Grade A Office buildings. While industrial uses are allowed in industrial/I-O buildings in general, most of such existing industrial/I-O buildings will likely be put to General Business uses under the current market situation. Moreover, Non-CBD Grade A Office or Non-Grade A Office sites are mostly located outside industrial areas. As the internal design, layout and structure of these buildings and the ancillary facilities are mainly to support non-industrial uses including office, these sites are not suitable for conversion to an industrial use.

     Owing to the unique locational and operational requirements (such as higher loading, higher ceiling, larger floor plate, more reliable power supply with back-up power and/or dust free environment, etc.), Special Industry uses (including modern logistics and data centres) are usually set up at purpose-built premises. Industrial buildings and I-O buildings currently with General Business uses are normally not suitable for conversion to a Special Industry use.
 
     As regards the supply of Grade A Office, the floor space of CBD and Non-CBD Grade A Offices is to a certain extent interchangeable through market forces. The shortage of CBD Grade A Office will drive up the rent of the district, causing some users to move to Non-CBD Grade A Office for business. This market reaction will help alleviate the shortfall of CBD Grade A Office in the short and medium term.
 
(3) For the planning regime, the Town Planning Board (TPB) reviews and revises the definition of land uses under statutory plans from time to time with reference to the prevailing social and economic needs. The current definition of "Industrial Use" on statutory plans is now extended to cover such uses as training, research, design and development, quality control and packaging related to industrial processes, as well as some emerging uses such as hydroponics, aquaculture, etc. Besides, uses that are always permitted under the "Industrial" zone have been widened to include "Office Related to Industrial Use", "Information Technology and Telecommunications Industries" and "Research, Design and Development Centre". Apart from updating and expanding the definition of "Industrial Use", TPB introduced the "OU" annotated "Business" (OU(B)) zone to provide greater flexibility for the uses of existing industrial land. For old industrial buildings within areas zoned "OU(B)" on statutory plans, redevelopment or wholesale conversion into commercial and non-polluting industrial uses (including offices, information technology, telecommunications and other creative industries) does not require application to TPB.

     During the sale of new industrial sites, the Lands Department (LandsD) will determine the uses of the lot under the land lease with reference to those permitted under the relevant statutory plan. Taking the three aforementioned industrial sites sold in the past two years as examples, besides the industrial use, other uses such as office in direct support of an industrial operation, information technology and telecommunications industries, research, design and development centre, laboratory, inspection and testing centre, audio-visual recording studio, media design and media production, etc. are permitted under the lease conditions.

     According to ITB, it is providing comprehensive support in respect of land, technical skills, funding and talent to encourage enterprises to relocate high value-added manufacturing processes back to Hong Kong, thereby promoting "re-industrialisation". This includes building an Advanced Manufacturing Centre and a Data Technology Hub in the Tseung Kwan O Industrial Estate; facilitating enterprises in moving towards high value-added production and gradually upgrading to Industry 4.0 through the Hong Kong Productivity Council; engaging in research and development (R&D) related to "re-industrialisation" through five R&D Centres, and financing enterprises to carry out R&D work through the Innovation and Technology Fund.
 
(4) Generally, private land owners may make waiver applications to LandsD for implementing uses not permitted under the land lease in their industrial buildings or lots, such as those uses having secured TPB's approval. In the past years, LandsD promulgated a number of streamlining measures to expedite the approval process including introduction of fees at standard rates for waiver applications in relation to information technology and telecommunications industries and industries generally permitted in an "Industrial" zone under statutory plans in 2001 and 2003 respectively. In promoting the policy for data centre development, the Government introduced a measure in 2012 to exempt the waiver fee for converting old industrial buildings into data centres and introduced another measure in 2016 to exempt the waiver fee for setting up testing and calibration laboratories in industrial buildings. In May 2016, LandsD introduced further streamlining procedures to reduce the processing time of waiver applications for data centres such that valid applications may be approved within two weeks upon receipt. As LandsD is implementing the above measures to streamline approval processes, there is no plan to set up a dedicated task force to handle waiver applications.

     Police today (May 23) appealed to the public for information on a man who went missing in Wong Tai Sin.
              
     Yeung Kwong-yin, aged 60, went missing after he left a clinic on Hammer Hill Road on January 24 afternoon. His family made a report to Police on the next day (January 25).
              
     He is about 1.73 metres tall, 63 kilograms in weight and of normal build. He has a square face with yellow complexion and short straight white hair. He was last seen wearing a green jacket with checkered pattern, grey pants, grey sports shoes and carrying a green waist bag.

     Anyone who knows the whereabouts of the missing man or may have seen him is urged to contact the Regional Missing Person Unit of Kowloon East on 3661 0316 or 9886 0060 or email to rmpu-ke-2@police.gov.hk, or contact any police station.

  

     Following is a question by the Hon Wu Chi-wai and a written reply by the Secretary for Financial Services and the Treasury, Mr James Lau, in the Legislative Council today (May 23):

Question:

     The Director of Audit recommended in the Report No. 66 of the Director of Audit, which was published in April 2016, that the Rating and Valuation Department (RVD) should seek the assistance of the Lands Department (LandsD) in providing information on cases of unauthorised change of use of agricultural land and relevant buildings identified in the course of LandsD's law enforcement work, so that RVD could take appropriate actions promptly on cases ineligible for rates exemption. To this end, RVD and LandsD have put in place, since May 2016, a notification mechanism (notification mechanism) under which the District Land Offices (DLOs) in the New Territories will copy to RVD the warning letters issued for unauthorised structures on agricultural land, and RVD will give priority to handling lands and properties with higher rateable values. In this connection, will the Government inform this Council:

(1) of the number of properties on agricultural lots in the New Territories assessed to rates in each of the past 5 years; in respect of such properties, the (i) total and (ii) average amounts of the annual rates payable, and (iii) the mean of such rates in each decile group;

(2) of the respective numbers of agricultural lots, in each of the past 5 years, which were (i) no longer exempted from assessment to rates because their uses had been changed to those not connected to agricultural operations, and (ii) granted exemption again from assessment to rates because their uses had been reverted to those connected to agricultural operations;

(3) of the number of Requisition for Particulars of Tenements (requisition forms) issued by RVD for properties on agricultural lots, and the number and percentage of such requisition forms returned by the owners/occupants, in each of the past 5 years; the details of the follow-up actions taken by RVD in respect of the cases in which the requisition forms were not completed correctly and returned on time, and the number of such cases;

(4) of the following information regarding the three development plans, namely the public housing development at Wang Chau, Yuen Long, Yuen Long South Development and Hung Shui Kiu New Development Area, respectively: (i) the number of agricultural lots involved, (ii) the number of lots the uses of which have been changed to those not connected to agricultural operations but for which the assessments to rates have not yet completed, (iii) the number of properties on the agricultural lots which have been assessed to rates and, in respect of such properties, the (a) total and (b) average amounts of the rates payable by the owners last year and (c) the mean of such rates in each decile group;

(5) given that as at the end of March this year since the establishment of the notification mechanism, RVD has received copies of warning letters involving about 2 600 agricultural lots, of the number of the properties on such lots assessed to rates or for which Demands for Rates were issued by RVD; the average number of working days taken from the issuance of warning letters by DLOs to the issuance of Demands for Rates by RVD;

(6) whether LandsD has set a target for its inspection work to ensure that the Government will not forgo any rates due to LandsD's failure to take timely law enforcement actions;

(7) apart from establishing the notification mechanism, of the measures taken by RVD in response to the aforesaid recommendation in the Audit Report; the changes in RVD's manpower and resources in the past 3 years for making assessments to rates in respect of properties on agricultural land?

Reply:

President,

     Section 36(1) of the Rating Ordinance specifies the types and circumstances of lands and properties that are exempt from assessment to rates. Agricultural land and the structures thereon used in connection with such land are among those exempt from assessment to rates. Properties exempt from assessment to rates are not included on the Valuation List. When agricultural land or the structures thereon have been changed to uses not connected to agricultural operations, irrespective of whether the change is in breach of other permitted uses or has been authorised, such land or structures are no longer exempt from assessment to rates, and the relevant information will therefore be included on the Valuation List.

     My reply to the various parts of the question raised by the Hon Wu Chi-wai is as follows:

(1) The numbers of assessments on agricultural lots in the New Territories, the total rates payable before the deduction of rates concession and the average rates payable in the past 5 years are tabulated in Table 1 of the Annex.

     The average rates payable before the deduction of rates concession for properties on agricultural lots in the New Territories in the past 5 years, sorted by rateable value, are tabulated in Table 2 of the Annex.

(2) The numbers of properties on agricultural lots in the New Territories that were no longer exempt from assessment to rates because of changes to non-agricultural operations and those that were exempt from assessment to rates again because of their reversion to agricultural operations in the past 5 financial years are tabulated in Table 3 of the Annex.

(3) Before conducting the annual general revaluation, the Rating and Valuation Department (RVD) will issue the Requisition for Particulars of Tenements (Form R1A) to ratepayers of properties but such forms will not normally be issued for agricultural lots not included on the Valuation List. Nevertheless, RVD will check the planning approvals granted by the Town Planning Board monthly and follow up cases involving change of use of agricultural land. The District Lands Offices (DLOs) in the New Territories under the Lands Department (LandsD) will also provide RVD with monthly lists on lease modifications and short term waivers in connection with private lots to facilitate timely assessment work by RVD.

(4) Since properties that are exempt from assessment to rates are not on the Valuation List, RVD does not possess the statistics on agricultural lots that are exempt from assessment to rates in Wang Chau, Yuen Long, Yuen Long South Development and Hung Shui Kiu New Development Area. Information relating to assessments on agricultural lots in the above three areas is tabulated in Table 4 of the Annex.

     As at April 1, 2018, the average rates payable before the deduction of rates concession for properties on agricultural lots in Wang Chau, Yuen Long, Yuen Long South Development and Hung Shui Kiu New Development Area, sorted by rateable value, are tabulated in Table 5 of the Annex.

     Based on the warning letters received from DLOs in the New Territories, there are about 150 agricultural lots in the above three areas that have been changed to non-agricultural operations and have yet to be assessed to rates as at the end of March 2018.

(5) to (7) Erection of unauthorised structures on old scheduled agricultural lots is prohibited under the Block Government Lease (formerly known as Block Crown Lease). According to established procedures, LandsD will inspect black spots of frequent breaches and act on complaints or referrals to follow up cases of unauthorised structures. When unauthorised structure is found on private agricultural land, LandsD will issue warning letters to the landowner concerned requesting rectification of breach.

     The Director of Audit published the Report No. 66 in April 2016 and recommended that RVD should seek the assistance of LandsD in providing information on unauthorised change of use of agricultural land and buildings identified in the course of LandsD's enforcement work, so that RVD could take timely actions on cases ineligible for rates exemption.

     RVD has implemented the recommendation of the Audit Commission and put in place a notification mechanism with LandsD. Since May 2016, if DLOs in the New Territories identify unauthorised structures on agricultural land during their enforcement actions, they will provide RVD with copies of the warning letters issued. To handle such cases more effectively, RVD set up a special team in April 2017 to follow up the assessment work, with priority given to land and properties of higher rateable values. Since the establishment of the notification mechanism, RVD has received copies of warning letters involving around 2 600 agricultural lots and has handled about 560 lots as at the end of March 2018. For the cases completed, it took on average about 45 working days for RVD to complete an assessment, counting from the date of site inspection.

     Following is the transcript of remarks at a media session by the Secretary for Transport and Housing, Mr Frank Chan Fan, after attending the Legislative Council meeting today (May 23):

Reporter: Should we have to worry about the construction quality of the rail, because there are two incidents in such a short period of time? And also shouldn't the MTR disclose to the public with regard to the incidents because one incident happened last month? Why is there such a long period of time before we know about this?

Secretary for Transport and Housing: First and foremost, I would expect the MTR to come up and inform the public and the media if there's anything of concern. Basically Hong Kong is a very open and transparent society, and expectations of the community and the media as well as other stakeholders are basically the same. I would relay the message to the MTR Corporation and encourage them to let the media and the public know, should there be any issues of concern.

(Please also refer to the Chinese portion of the transcript.)

     The overall Comprehensive Social Security Assistance (CSSA) caseload in April rose by 75 cases, remaining more or less the same as that of March, according to the latest CSSA caseload statistics released by the Social Welfare Department today (May 23).

     The total CSSA caseload at the end of April stood at 231 543 (see attached table), with a total of 332 875 recipients.

     Analysed by case nature, low-earnings cases and permanent disability cases registered month-to-month decreases of 1.4 per cent and 0.2 per cent to 4 125 cases and 17 006 cases respectively.

     Old age cases increased slightly by 0.1 per cent to 144 244 cases. Unemployment cases, single parent cases and ill health cases remained steady at 12 619 cases, 25 673 cases and 23 576 cases respectively.