City being wishy-washy about raising water tariffs

PUBLISHED : Thursday, 27 October, 2011, 12:00am
UPDATED : Thursday, 27 October, 2011, 12:00am


Despite the price rise, water officials said they had no plan to raise water tariffs, which have not changed since 1995. But they pledged to continue studying the possibility of adjusting the progressive tariffs for water use ...

SCMP, October 21

How do you like it? We do not raise dues, we adjust a progressive tariff. Our financial secretary may want to take some speech lessons here the next time he raises sinners' taxes - 'we're just being progressive'.

But someone has already been progressive in water charges, as the chart reveals. The consumer price index (CPI) clearly shows that water charges have already risen more than 7 per cent over the past three years.

This is still well below the overall rate of inflation, however, which begs the question: should water rates be tied to the CPI, as the government has done with charges for so many other public services - public transport, for instance - or should it reflect the cost of water?

It's actually a pointless question. We haven't even progressed that far yet in water charges. The last time the question was raised, our legislators agreed that water is a resource affecting people's livelihoods and therefore no increases at all should be allowed.

Yes, I don't quite follow the logic either. Could this gaggle of lawyers please tell us if there is any item of living costs that does not affect people's livelihoods?

Let's at least congratulate the Water Supplies Department, however, for having sneaked a few progressive adjustments under this specious thinking. Well done, fellows. These lawyers never look at CPI sub-indices; they're too busy concocting constitutional challenges.

But the progressive adjustments have not matched the accelerating climb of consumer prices over the last two years. And, as to water tariffs covering water costs, try looking down a dry well in a desert.

At present, consumers pay only 45 per cent of the costs of their water and this figure has steadily declined over the years. With the latest increase in water prices charged by mainland authorities, the ratio can only dip further.

This indeed has inflation implications, as in water-usage inflation. The biggest single reason for raising water tariffs is that the only effective way of ensuring water is used well is to charge at least the full cost, to make people conserve water because they will be stung if they do not.

It is becoming particularly urgent that we do so because all indications point to tighter water supply in the future. Guangdong, which accounts for 80 per cent of our supply, cannot count on having enough water for its own needs indefinitely.

The alternative is a desalination plant. Even with the latest technology, however, such a plant cannot produce water at less than four times our present water tariff and we would need a string of them to produce even a fraction of our present water consumption. Both costs and tariffs will inevitably have to go up. It is best we start now and make the adjustment a smooth one.

But all our government will speak of at the moment is improving efficiency by plugging water leaks. We reported a Development Bureau spokesman, for instance, as saying that replacement of old water mains will reduce leakage from 25 per cent to 15 per cent by 2015.

This is disingenuous. The water department already had the leakage rate down to 19 per cent last year and will never get it below 10 per cent without spending trillions of dollars.

Perhaps we need a reminder of what water shortage really means. Hong Kong had to suffer water rationing seven times between 1965 and 1982. I remember the last of these occasions well, rushing home for a shower before the cut-off because I had already missed one the night before and didn't relish the alternative with a bucket of water left in the bathtub from the morning ration.

Then Guangdong opened the taps for us and we haven't suffered it since. But this does not say it can never happen again. We need to make our adjustments - and more than just hidden 'progressive' ones.