The Audit Commission yesterday slammed the Lands Department for not checking the financial ability of companies that lease government lands over short-term period.

This has resulted in an increase of unpaid rents from HK$42 million in 2004 to HK$163 million in 2005, a commission report said.

The report released yesterday found that the department had granted three sites between 2000 and 2002 for provision of an amusement park, a petrol-filling station and a plant nursery.

But the tenants had used the sites for fee-paying car parks. The report also pointed out that it took the department 19 months and 35 months in two of the cases to terminate the tenancies.

Director of Audit Benjamin Tang said the investigation was helping the department improve the administration. "We are not targeting at individual," he said.

The audit report also found that the department had failed to assess the financial capability of the tenants, resulting in the increase of rent arrears from HK$42 million as on March 31, 2004 to HK$163 million as on March 31, 2005.

The audit urged the department to consider vetting the financial position of major car-park tenants before granting them the site.

A spokesman for Lands Department said they had already implemented most of the audit's recommendations.