Page 89 - URA Annual Report 2021-22

(V) Financial Resources, Liquidity and Commitments
As at 31 March 2022, the URA’s net liquidity position totaled $25,845 million. At the same date, the URA’s outstanding commitments to the commenced projects, together with the construction cost on projects based on the valuation carried out by the URA’s in-house professionals, were estimated at $6,276 million.
In addition to the MTN Programme mentioned in paragraph II (c) above, the URA also maintained uncommitted bank credit facilities in Hong Kong. The external funding and credit facilities ensured the URA would have sufficient financial resources to carry out its urban renewal programme as planned.
Individual projects, with various development potentials, are tendered out at different times during property market cycles. Subject to the market conditions prevailing at the time of tender submission, the upfront payments may be higher or lower than the URA’s acquisition costs. As at 31 March 2022, the total costs of properties under development, excluding provision for impairment, was $22,501 million. The value of properties under development is exposed to the risk of property price fluctuation. Should the projected future value of the properties under development is lower than its actual/estimated acquisition and clearance costs, impairment loss will be recognised in the URA’s books.
It is estimated that a total cash outlay of about $84,000 million, excluding operational overheads, will be required in the coming five years to meet both of the URA’s currently outstanding commitments and its forthcoming cash outlay for the implementation of the projects. This amount covers the URA’s works in redevelopment, rehabilitation, preservation, revitalisation and retrofitting. In addition to current liquidity, the projected cash outlay will be met by future upfront payments from project tenders, share of surplus sales proceeds from joint development projects and proceeds from sale of properties in the corresponding period. A financing strategy study to explore different financing options was completed. Should funding is required for URA’s urban renewal works, financing will be sought via bank loans and/or bond issuance as appropriate.
Operating in a prolonged pandemic environment, the URA will continue to manage its businesses in an agile manner and monitor its financial position closely, with an aim to accomplishing its urban renewal missions while maintaining long-term sustainability.
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Management Discussion and Analysis Projects at a Glance Corporate Governance