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LCQ18: Pilot Scheme for Arbitration on Land Premium

     Following is a question by the Hon Alice Mak and a written reply by the Secretary for Development, Mr Michael Wong, in the Legislative Council today (June 2):

Question:

     In October 2014, the Government introduced the Pilot Scheme for Arbitration on Land Premium (the Pilot Scheme) under which an additional avenue is provided for applicants of lease modification/land exchange (LM/LE) and the Lands Department (LandsD) to expedite the conclusion of negotiations on the amounts of land premium by both sides in LM/LE cases. Given the lukewarm response of the trade to the Pilot Scheme, the Government introduced refinements to the Pilot Scheme in August 2020, setting upper and lower limits for the amount of land premium payable for cases under the Pilot Scheme. In this connection, will the Government inform this Council:

(1) of the respective numbers of LM/LE applications received and handled by the LandsD (a) in each of the five years before and (b) since the aforesaid refinements came into effect and, among them, the number of cases in which the applicants were invited to participate in the Pilot Scheme; among the latter cases: 

(i) the respective numbers of cases in which the invitation were accepted by the applicants, arbitrations are being/were conducted, and arbitrations were concluded;

(ii) the respective shortest, longest and average arbitration time taken for those cases in which arbitrations were concluded; and

(iii) the number of cases in which those applicants who had declined such invitations subsequently reached a consensus with the LandsD over the amount of land premium, as well as the respective shortest, longest and average negotiation time taken for such cases; 

(2) of the number of LM applications for rezoning agricultural lands in the New Territories as residential sites handled by the LandsD in each of the past five years, and the land area involved and the number of units proposed to be built in each application; the respective shortest, longest and average time taken for handling such applications; and 

(3) as the Government indicated in its reply to a question raised by a Member of this Council on the 5th of last month that considering that the issuance of provisional basic terms offer as well as premium offer were respectively two key milestones in the handling of a LM application, the Steering Group on Streamlining Development Control would follow up with the LandsD on shortening the time required for these two procedures, of the progress of the relevant work?

Reply:

President,

     To increase land supply, the Government has been making all-out efforts to identify and produce land as well as to expedite the land development process, which includes reviewing the approval procedures for applications related to private development projects from time to time and introduction of new operation models to streamline the approval process. To this end, the Government launched the Pilot Scheme for Arbitration on Land Premium (the Pilot Scheme) in October 2014. Furthermore, since September 2018, the Lands Department (LandsD) assigned its Valuation Section in the Headquarters to handle the premium assessment of all land transactions (including lease modification and land exchange) centrally. In order to further expedite the processing of lease modification and land exchange applications, the LandsD also established the Land Supply Section (LSS) in April 2019 dedicated to handling cases under the Government’s Land Sale Programme and lease modification and land exchange cases involving large-scale development. Subsequently, the Government promulgated refinement measures to the Pilot Scheme in August 2020, including the setting of upper and lower limits of premium payable. The Pilot Scheme will run until October 23, 2022.

     My reply to the various parts of the question is as follows:

(1)(a) The LandsD had received 256 lease modification and land exchange applications (including simplified and technical lease modifications) between January 2015 and July 2020. Within the period, the LandsD had considered 57 lease modification and land exchange cases which would be eligible for arbitration under the Pilot Scheme and proactively invited 14 applicants to participate in the Pilot Scheme. One of the applicants accepted the invitation to participate in the Pilot Scheme and the premium was settled through arbitration in 2015. The arbitration process took about 11 weeks from the formation of the Arbitral Tribunal to the award by the Tribunal. For the remaining 13 cases, applicants chose to make appeals through the established mechanism and 10 of the cases reached agreement with the LandsD on the premiums in the end. For these 10 cases, the premium negotiation process took about two to 33 months (nine months on average) from invitation to participate in the Pilot Scheme to accepting the premium offer. 

(b) Since implementing the refinement measures of the Pilot Scheme in August 2020, the LandsD has further invited applicants of 16 eligible cases to settle premium negotiations through arbitration under the Pilot Scheme. So far, no such application has been received. Other applicants of lease modification cases eligible for the Pilot Scheme may also take initiative to invite the LandsD to conduct arbitration. 

(2) In the past five years (i.e. from 2016 to 2020), the LandsD had completed and executed 18 land exchange and lease modification cases involving change of land use from agriculture to domestic purpose in the New Territories. The concerned site area is about 909 000 square meters providing about 13 900 flats (see note). The processing of such cases from receipt of a valid application to the execution of the lease involves many different procedures, including premium negotiations etc., and the processing time of each application varies depending on the complexity of the case and the issues involved. Since the period from receiving the application to execution of the lease often involves some time beyond the control of the department (for example, the applicant needs time to prepare technical assessments), the LandsD does not have readily available statistics concerning the processing time of such cases.

     Given that the issuance of provisional offer with basic terms as well as premium offer are two key milestones in a lease modification application, the Development Bureau (DEVB) and the LandsD are following up on how best to shorten the time required for these two procedures, including setting different priorities and target timetables for different categories of cases. The proposals will be submitted to the Steering Group on Streamlining Development Control convened by the DEVB and the related industry group for discussion in due course.

Note: The number of flats is estimated based on relevant lease conditions. The actual number of flats would depend on the actual design of the proposed development projects. read more

LCQ8: Assisting brownfield operators in reprovisioning their operations

     Following is a question by the Hon Lau Kwok-fan and a written reply by the Secretary for Development, Mr Michael Wong, in the Legislative Council today (June 2):
 
Question:
 
     As shown in the report of the Study on Existing Profile and Operations of Brownfield Sites in the New Territories published in 2019, among the about 1 580 hectares of brownfield sites in Hong Kong, 90 per cent were used for various types of industrial and commercial activities. The Government projected last year that over 860 hectares of brownfield sites would be redeveloped for housing and other uses in future. Some brownfield operators and their employees are worried that they will not be able to identify sites for reprovisioning their operations, making it difficult for them to sustain their living. In this connection, will the Government inform this Council:
 
(1) whether it will set up a task force on the reprovisioning of brownfield operations to be responsible for work such as assisting brownfield operators affected by land resumption in identifying sites for reprovisioning their operations, applying for ex-gratia allowances and drawing up business resumption plans; if not, of the reasons for that; 

(2) as the Government indicated last year that those affected brownfield operators whose operations could not operate in multi-storey buildings might consider relocating to the sites zoned “Open Storage” in other areas in the New Territories, and after excluding those open storage sites which had been included in the Hung Shui Kiu/Ha Tsuen, Yuen Long South and New Territories North New Development Area projects, there were still 171 hectares of open storage sites, whether it has assessed if such sites are sufficient for accommodating all of such affected brownfield operators; and 

(3) given that as at December 2017, about 16 000 hectares of land in Hong Kong were zoned “Green Belt”, whether the Government will conduct a comprehensive study on the use and existing profile of such belt, so as to facilitate the identification of suitable sites for brownfield operators to reprovision their operations; if not, of the reasons for that?

Reply:
 
President,
 
     The reply to the various parts of the Hon Lau Kwok-fan’s question is as follows:
 
(1) Brownfield operations are business undertakings. As in the case for other business undertakings affected by development projects, the Government’s policy is to provide eligible business operators with monetary compensation, so as to assist their relocation. They may receive a statutory compensation, or an ex-gratia allowance alternatively. The Finance Committee approved in July 2018 the substantially-improved arrangement for ex-gratia allowances, the disbursement of which now being centrally administered by the Lands Department (LandsD) (Note 1). 

     While the Government does not make re-provisioning arrangements for affected brownfield operators, the Development Bureau (DEVB) and relevant departments are offering them advice on planning and land issues in relation to relocation sites they have identified. Under the First Phase development of the Kwu Tung North and Fanling North New Development Area (NDA) for example, the DEVB has indicated to affected operators that the Government stands ready to provide assistance on planning and land matters arising from relocation, as well as to help expedite the approval process of related planning applications through co-ordination of comments from different responsible departments which administer the established statutory and administrative procedures respectively. This approach is quite effective as we now see some planning applications being approved successively and will do the same in NDAs. If necessary, we may strengthen dissemination of information about the facilitation to affected brownfield operators.

(2) Currently, brownfield operators may consider moving their businesses to other locations zoned “Open Storage” (OS) in the New Territories. In addition, if a site identified for relocation is under another zoning, the operator may submit a planning application to the Town Planning Board (TPB), which will assess such applications with reference to the criteria contained in a set of revised Guidelines (TPB PG-No. 13F) (Note 2) promulgated in March last year. 

     In accordance with the TPB PG-No. 13F, rural areas in the New Territories covered by statutory plans are classified into four categories (Category 1 to 4) so as to channel open storage and port back-up uses to specific areas, thereby preventing them from proliferating haphazardly into the unsuitable areas. Category 1 (mainly including areas zoned “OS”, “Other Specified Uses” annotated “Port Back-up Uses”, “Industrial” or “Industrial (Group D)”) and Category 2 (mainly including areas without a clear planning intention or fixed development programme, and areas to be gradually developed along major upcoming infrastructural projects nearby) cover about 585 hectares (Note 3) and 281 hectares of land respectively. In general, there are good chances for the TPB to approve relevant planning applications within areas under these two categories, if government departments do not hold adverse comment on the uses applied for, or if the concerns of nearby residents may be mitigated through the TPB imposing approval conditions.
 
     The above two categories involving a total of around 866 hectares of land do not include areas to be redeveloped for logistics and port back-up uses in the NDAs (including Kwu Tung North/Fanling NDA, Hung Shui Kiu/Ha Tsuen NDA, and Phases 1 and 2 of Yuen Long South Development Area). Prior to the implementation of the said NDAs, existing open storage and port back-up uses in relevant areas may warrant TPB’s sympathetic consideration under usual circumstances until the relevant land is due for resumption for redevelopment. In this regard, departments would, according to the works programme, endeavour to address the reasonable concerns of affected brownfield operators and allow them to move out in an orderly manner by batches.
 
     Separately, the LandsD is making available suitable vacant government sites for letting to eligible business operators affected by the land resumption and clearance exercises for NDA or other relevant government development projects, by way of short-term tenancy through tender. Tenders of the three pieces of government land in Yuen Long and Fanling in the first batch were awarded at the end of last month. The next batch of three other pieces of government land in Tuen Mun and Kwu Tung North would be put to tender in the same manner within this month. The LandsD would continue to identify suitable vacant sites, and plan to roll out the third batch later for eligible business operators to rent with priority by way of short-term tenancy through tender.
 
(3) In general, the planning intention of the “Green Belt” (“GB”) zone is primarily for defining the limits of urban and sub-urban development areas by natural features. Mainly naturally vegetated areas and slopes, most of the land within the “GB” zone is classified as Category 4 under TPB PG-No. 13F. If the land in question remains within the “GB” zone, applications for open storage and port back-up uses are generally not supported unless under exceptional circumstances. 

     The Government keeps an open mind on the idea of rezoning suitable “GB” sites for other uses (e.g. residential including public housing) to supply developable land, and has been doing so. Indeed, among more than 210 sites identified last few years by the Government with potential for housing development in short to medium term, around one-thirds of them (77 sites) are within the “GB” zone. That said, as explained in my response to part (2) above, our current planning direction is to consolidate existing brownfield operations at appropriate locations with less environmental impacts. Rezoning “GB” sites for open-air industrial uses is not in line with this direction.
 
     The current large-scale open-air operations on brownfield sites may not be the most optimal use of land for sustainable development. Expecting the Government to make available land of a similar size for affected brownfield operators to re-establish their existing operations is not a practicable option. At a macro planning level, we have reserved in the Hung Shui Kiu/Ha Tsuen NDA and Yuen Long South Development Area a total of 72 hectares of land (some of which for development of multi-storey buildings (MSB)) to provide planned and concentrated accommodation to consolidate brownfield operations in a manner achieving better land use efficiency. We expect that a concrete proposal in respect of the development models of the first batch of MSB sites would be in shape next year, to meet the completion of the site formation works for this batch of sites as early as in 2023. In addition, we would continue to reserve land at suitable locations, including exploring feasible locations in other major development projects, for consolidating brownfield operations.
 
Note 1: Affected business operators may obtain information on the compensation arrangements and contact information of relevant offices through the LandsD’s website, introduction video and pamphlet (website: www.landsd.gov.hk/en/land-acq-clearance/land-resumption-clearance/rehousing.html).
 
Note 2: The full name of the Planning Guidelines is “Town Planning Board Guidelines for Application for Open Storage and Port Back-up Uses under Section 16 of the Town Planning Ordinance” (website: www.info.gov.hk/tpb/en/forms/Guidelines/pg13f_e.pdf).
 
Note 3: The area zoned “OS” outside various NDA projects, after the exclusion of part of the land recently included in San Tin/Lok Ma Chau Development Node and the Remaining Phases of Public Housing Developments at Wang Chau, has been adjusted from 171 hectares to about 152 hectares. This 152 hectares of land is part of the 585 hectares of land under Category 1. read more

LCQ13: Law enforcement for anti-epidemic measures

     Following is a question by Dr the Hon Lo Wai-kwok and a written reply by the Secretary for Food and Health, Professor Sophia Chan, in the Legislative Council today (June 2):
 
Question:
 
     Under the Prevention and Control of Disease (Compulsory Testing for Certain Persons) Regulation (Cap. 599J), the Secretary for Food and Health may issue a compulsory testing notice (CTN) requiring a specified category or description of persons to undergo compulsory coronavirus disease 2019 testing by a specified deadline, and a prescribed officer may make a compulsory testing order (CTO) to require a person who have failed to comply with a requirement under a CTN to undergo the testing by a revised deadline. A specified person who fails to comply with a requirement under a CTN commits an offence and is liable on conviction to a fine at level 3 (i.e. $10,000), and such person may discharge liability for the offence by paying a fixed penalty of $5,000. A person who fails to comply with a requirement under a CTO commits an offence and is liable on conviction to a fine at level 4 (i.e. $25,000) and to imprisonment for six months. Besides, the Prevention and Control of Disease (Disclosure of Information) Regulation (Cap. 599D) empowers a health officer or an authorised officer to require a person to furnish or disclose information relevant to the handling of the public health emergency. A person who fails to comply with the requirement commits an offence and is liable on conviction to a fine at level 3 and to imprisonment for six months. In this connection, will the Government inform this Council:
 
(1) of (i) the number of persons who were issued a fixed penalty notice for failure to comply with a requirement under a CTN, and the respective numbers of persons who were convicted due to failure to comply with a requirement (ii) under a CTN, (iii) under a CTO and (iv) of disclosing the aforesaid type of information, since the outbreak of the epidemic, with a breakdown by the penalty imposed on the convicted persons; and
 
(2) whether it will consider amending the legislation to raise the penalties for the aforesaid offences, thereby enhancing the deterrent effect; if so, of the details; if not, the reasons for that?
 
Reply:
 
President,
 
     The global epidemic situation remains severe with mutant variants ravaging many parts of the world. Although cases involving mutant variants have not yet caused an outbreak in the community, we should not let our guard down. It is essential for us to take all necessary measures to strengthen epidemic control by guarding against the importation of cases and the resurgence of domestic infections, and to further enhance the precision of the control measures to be taken in a bid to achieve the target of “zero infection” with the support and co-operation of the general public.
 
     My reply to the various parts of the question raised by Dr the Hon Lo Wai-kwok is as follows:
 
(1) Strengthening COVID-19 testing is an integral part of the epidemic control strategy of the Special Administrative Region (SAR) Government, which can help slow down the transmission of the virus by early identification, early isolation and early treatment. To further strengthen testing, the SAR Government enacted the Prevention and Control of Disease (Compulsory Testing for Certain Persons) Regulation (Cap. 599J) (the Regulation) in November 2020 to provide a legal framework for the Government to specify by compulsory testing notice (CTN) published in the Gazette a category or description of persons who are required to undergo a test for COVID-19, taking into account the epidemic development.
 
     Under the Regulation, persons who fail to comply with the CTN may be fined a fixed penalty of $5,000. If a prescribed officer has reason to believe that a person has failed to undergo a specified test in compliance with the requirement under a CTN, the prescribed officer may, within 30 days after the deadline of the CTN, by written order served on the person (compulsory testing order (CTO)) to require that person to undergo a specified test. Persons who fail to comply with a CTO is liable on conviction to a fine of $25,000 and to imprisonment for six months.
      
     Insofar as CTNs are concerned, the Department of Health has processed 1 532 CTOs and 251 fixed penalty notices as at May 23, 2021. Thus far, there has not been any conviction cases relating to non-compliance with CTOs.
 
     On the other hand, pursuant to the Prevention and Control of Disease (Disclosure of Information) Regulation (Cap. 599D):
 
(i) if a health officer/an authorised officer reasonably believes that any information is within the knowledge, in the possession or under control of a person and is relevant to the handling of the public health emergency or identification and tracing of any person who may have been exposed to the risk of contracting the disease, the health officer/authorised officer may require that person to give the information. Any person who fails to comply with the requirement or gives any false or misleading information to a health officer/an authorised officer in a material particular commits an offence; and

(ii) Any person, when attended by a medical practitioner acting in the course of professional practice, knowingly gives to the medical practitioner any false or misleading information of the person that is relevant to the risk of exposure or contracting the disease, commits an offence.
 
     Offenders are liable on conviction to a fine of $10,000 and to imprisonment for six months.
      
     As at May 23, 2021, two persons have been sentenced to community service for 120 and 100 hours by the magistrates’ courts respectively for contravening Cap. 599D.
 
(2) Generally speaking, most persons have complied with the requirements of CTN and CTO in undergoing testing, or have provided information requested by health officers or authorised officers. The violations mentioned above are isolated cases. The Government will continue to closely monitor any further violations, and will timely review relevant measures and regulations. read more

LCQ10: Arrangements for primary schools to cease operation

     Following is a question by the Hon Cheung Kwok-kwan and a written reply by the Secretary for Education, Mr Kevin Yeung, in the Legislative Council today (June 2):
 
Question:
 
     It has been reported that with the population of school-aged students in the Primary One (P1) school net to which the Island Road Government Primary School (IRGPS) belongs decreasing continuously in recent years, the Education Bureau (EDB) has decided that IRGPS will cease operating P1 classes starting from the 2022-2023 school year and cease operation fully in the 2024-2025 school year. For those students currently studying P1 and Primary Two in IRGPS as well as those to be admitted to IRGPS in the 2021-2022 school year, arrangements will be made for such students to transfer to other schools in the same district in the 2024-2025 school year. Regarding the arrangements for primary schools to cease operation, will the Government inform this Council:

(1) whether it has assessed (i) the supply and demand figures for P1 places in each District Council (DC) district (set out in a table), and (ii) if there will be a surplus in such school places, in each of the coming six school years; if it has assessed and the outcome is that there will be, until when such trend will last;

(2) of a list of the government/aided primary schools which ceased/will cease operating classes of all/certain grades in the past six school years, the current school year and the coming six school years, and set out in the table below the relevant information by the DC district to which such schools belonged/belong;
 

DC district Name of school School type
(Government/aided)
School year in which operation ceased/will cease, and the grade(s) involved Reason for cessation of operation
         

(3) of the justifications for the EDB not waiting until all students of IRGPS have graduated before closing down the school; whether the EDB has assessed what difficulties in study and adaptation to be faced by IRGPS students during school transfer in the future, as well as the support to be provided for them in this regard;

(4) of the time when the EDB learnt of a surplus in school places in the P1 school net to which IRGPS belongs; why the EDB had not made the relevant arrangements at an earlier time so as to obviate the need for IRGPS students to change school for completing their primary school education;

(5) whether the EDB will consider, when making a decision on whether or not to cease the operation of a school in the future, making the following its prime consideration: allowing all students to graduate from their original school so as to spare them facing the difficulties arising from changing school; and

(6) of the compassionate and job transfer arrangements to be made by the EDB for teachers and staff of those primary schools that will soon cease operation?
 
Reply:

President,
 
     The reply of the Education Bureau (EDB) to the question raised by the Member is as follows:
 
(1) With reference to the “Hong Kong Population Projections 2020-2069” released by the Census and Statistics Department in September 2020 and the “Projections of Population Distribution 2021-2029” released by the Planning Department in March 2021, it is projected that the school-age population aged six residing in Hong Kong in the next six years (from 2022 to 2027) will decrease from 58 500 to 48 500. The projected mid-year school-age population by district is at the Annex. Those age groups are considered appropriate for Primary One (P1) education from the 2022/23 to 2027/28 school years.
 
     Under the Primary One Admission (POA) System, the 18 districts in Hong Kong are currently demarcated into 36 school nets. Regarding the demand for school places, the number of applicant children for POA and the demand for school places in each district and each school net for every cycle will be affected by a number of factors such as the demographic changes, number of newly arrived children and parental choices (e.g. whether to get admission to public sector schools or other types of schools). The EDB will continue to keep in view the changes in student population, maintain close communication with the sector and encourage the sector to plan ahead, with a view to sustaining the overall development of the school sector and ensuring prudent use of resources while maintaining the quality of education.
 
(2) In the school years between 2014/15 to 2020/21, an aided primary school in Kowloon City District ceased operation in the 2019/20 school year. In the coming six school years (i.e. from the 2021/22 to 2026/27 school years), apart from the Island Road Government Primary School (IRGPS), five other public sector primary schools will cease operation. They include one aided primary school in the Eastern District on Hong Kong Island ceasing operation in the 2021/22 school year; two time-limited aided schools in Kwun Tong District and one time-limited aided school in Yuen Long District ceasing operation in the 2023/24 school year; and one time-limited aided school in Tai Po District ceasing operation in the 2026/27 school year.
 
(3) to (5) According to the EDB’s earlier projection, the overall demand for public sector P1 places would reach its peak in the 2018/19 school year and then decline gradually. Given the declining trend in the population of school-aged primary students in the Southern District (School Net 18) on Hong Kong Island, there will be an excessive supply of primary school places over demand in the district.
 
     Being the school sponsoring body (SSB) of government schools, the EDB, having carefully considered various factors including government policies, demographic changes, demand and supply of school places, overall development needs of government schools and utilisation of government resources, has decided to cease the operation of IRGPS in an orderly and gradual manner. The EDB has already explained the background and related arrangements to the stakeholders in different occasions and will continue to provide support to the related parties as needed.
 
     The interest of students is the prime concern of the EDB. From an educational point of view, an exceedingly low number of students will affect the effectiveness of students’ learning and development through group activities. The provisions of manpower and other resources will decrease following the reduction in the number of classes. Therefore, a school will normally cease operation in three years from the school year it stops operating P1 classes. 
 
     To minimise the impact on students currently studying at IRGPS, the school will officially cease operation in the 2024/25 school year to allow its current P3 to P6 students to finish their primary stage of school education at the school. In the coming three school years, IRGPS will continue to cater for the needs of its students in relation to curriculum, extra-curricular activities and other aspects as far as practicable and make sure that the students will not be affected. As for P1 and P2 students, the school and the EDB will provide appropriate assistance to refer them to other primary schools in the same school net, i.e. the Southern District (School Net 18), to continue their study. Their new schools will also provide necessary support to help the students adapt to their new school life as soon as possible.
 
     Besides, for students who have been allocated to IRGPS under the POA System in this school year, if their parents wish to seek admission of their children to other primary schools in the same school net, they may first register with IRGPS and then approach the School Places Allocation Section of the EDB from June 11 to August 31, 2021. The EDB will re-allocate the students concerned to schools with vacant P1 places in the Southern District (School Net 18). Parents may also apply to their preferred schools for admission by themselves.
 
(6) Being the SSB of government schools, the EDB has a mechanism in place for the deployment of teachers to cater for the development needs of its schools. Regarding IRGPS, the EDB will arrange suitable staffing to cater for the learning and development needs of students, having regard to the operational needs and actual circumstances of the school in the next few years. When the school ceases operation in the 2024/25 school year, the EDB will redeploy the teaching and non-teaching staff appointed on civil service terms to other government schools. As for contract staff, the school will make appropriate arrangements according to the terms of their contracts.
 
     For aided primary schools, according to the EDB’s guidelines, SSBs operating more than one school should in the first instance arrange to redeploy surplus staff of a school which will cease operation to fill the available vacancies in other schools under their sponsorship, including teaching posts within and outside the approved staff establishment. Besides, the EDB will also upload information of teaching vacancies reported by aided primary schools on its website for general information of interested teachers. In fact, there will be a certain number of teaching vacancies arising from natural wastage every year, which can help absorb the affected teachers. read more