The insurer of piling contractor B+B Construction Company will pay the Housing Authority 23.8 million Euros for the damages arising from substandard piles at Tin Chung Court in Tin Shui Wai.

Assistant Director of Housing for Legal Service Anthony Wong today said the authority and the insurers' consortium based in Germany have reached a settlement through mediation.

"The authority and the consortium of insurers confirm that all outstanding matters between them in relation to the indemnity issue have now been resolved," he added.

Having regard to the inherent risks in the legal proceedings in enforcing the indemnity policies in Germany, the authority considers the amount to be reasonable and realistic.

Mr Wong said although the High Court ruled that the authority should get $550 million in compensation for the issue, the authority had a slim chance of getting the full amount because the contractor has been in liquidation and the compensation the insurer must pay is subject to the insurance policy.

Deputy Director of Housing Ada Fung said the incident has come to an end and similar incidents are unlikely to occur because the authority introduced new control measures in 2000.