The Urban Renewal Authority said they have the financial capability to support its Kwun Tong redevelopment project despite a credit crunch caused by the current financial turmoil, its chairman Barry Cheung said yesterday.

Cheung said the authority has a cash flow of HK$10 billion and is able to secure other financing sources, such as bank loan, to support the acquisition of properties in the Kwun Tong project.

"Our financial situation is very strong with more than HK$10 billion on hand," he said.

The authority is expected to spend HK$14 billion to acquire properties from 1,656 landlords.

The authority will make their offers to the landlords in December. The offers will be calculated based on the price of a seven-year old flat in the district.

The landlords have 90 days to consider whether to accept the offers.

Cheung stressed that the authority can pay for the acquisitions even if all landlords accept the offers.

The Kwun Tong redevelopment project covers 5.35 hectares of land with 5,000 residents and 520 shops. The project will cost HK$30 billion and takes 12 years to complete.

(HK Edition 10/21/2008 page1)