HK touts pay-as-we-use water deal

PUBLISHED : Thursday, 23 October, 2003, 12:00am
UPDATED : Thursday, 23 October, 2003, 12:00am

Environment chief says the proposal, which would see ceiling on supply scrapped, could reduce waste

Hong Kong has proposed paying only for water it uses - an idea that could conserve water for Guangdong, the environment chief said yesterday.

Under the proposal, instead of buying a maximum of 800 million cubic metres of water annually from the Dongjiang, or East river, it would buy a minimum of 600 million. For amounts in excess of that, it would pay a 10 per cent premium, Sarah Liao Sau-tung told legislators.

Making Hong Kong pay a premium could serve as an incentive to take less water than in recent years. But it is not clear whether consumers would also be charged a graduated tariff to deter waste.

Hong Kong has been trying to renegotiate its water-supply agreement with Guangdong for two years. Dr Liao, the Secretary for Environment, Transport and Works, said nothing on the talks' progress.

About 80 per cent of the water Hong Kong uses comes from the Dongjiang. The rest is from the city's reservoirs. Last year, it received 743 million cubic metres of Dongjiang water but paid for 800 million cubic metres at a cost of $2.47 billion, with each cubic metre costing $3.085.

In each of the past five years, Hong Kong has taken less water than it has paid for because of abundant rainfall and the continuing relocation of factories across the border. Between 1999 and 2001, the city dumped 327 million cubic metres of water from its reservoirs.

Dr Liao said Hong Kong wanted a more flexible supply deal and told legislators the new proposal would benefit both sides.

'Based on the principle of conserving precious water resources, we suggest cutting the water supply to relieve pressure on the ecology of the Dongjiang,' she said.

'[The proposal] would also allow the diversion [of supplies] to regions in Guangdong desperately in need of water. Our suggestion will surely create a win-win situation.'

Dr Liao said both sides agreed the price Hong Kong pays should be adjusted according to operating costs, inflation or deflation and exchange rates.

Yesterday, she revealed data to back Hong Kong's claim for a lower price.

Over the past five years, the yuan had appreciated by 1.15 per cent against the Hong Kong dollar. At the same time, prices had risen in Guangdong but fallen in Hong Kong. In each of those years, the gap between prices in the two places had narrowed by 1.3 per cent.

For its part, Guangdong says it has had to spend more to conserve water at a time when economic development in the region has increased demand for the resource.