The Housing Authority's Financial Committee has endorsed its Revised Budget for 2002/03 and Proposed Budget for 2003/04 for the Authority's approval next month. The Committee also noted the financial forecasts from 2004/05 to 2006/07.

The Authority's Consolidated Operating Account for the 2002/03 Revised Budget shows a deficit of $775 million while the Proposed Budget for 2003/04 also envisages an operating deficit of $524 million.

Committee Chairman Eddy Fong attributed the deficits to income reductions following the 10-month moratorium in sales of the Home Ownership Scheme and the subsequent cessation of it.

"Although the Authority faces a very difficult financial situation, we are fairly confident that we can overcome our difficulties," Mr Fong said, adding the Housing Department is actively pursuing a number of initiatives to ensure a steady and smooth availability of funds to meet the Authority's programmes and operations in the longer term.

"These include a comprehensive review of the financial arrangements between the Government and the Authority, arrangements to dispose of the surplus HOS flats, as well as potential divestment of the Authority's retail and carparking facilities," he said.

The Authority will also implement various business process re-engineering and cost-saving initiatives to achieve savings.

"The Authority will continue to adopt prudent financial policies to make the best use of its funds and to strive to obtain better value for money in respect of the services it provides," Mr Fong said, maintaining his optimism in balancing the Authority's books despite the challenges ahead.