Hong Kong's water politics: clarity needed
Frederick Lee and James Nickum say subsidies need to be replaced by direct payments to improve the Water Supplies Department's financial health
The Dublin Principles of 1992 stated that water is an economic good. Someone forgot to tell the citizens of Dublin. Tens of thousands have poured out onto the streets in recent months to protest against a proposal by the government to charge people for water according to the amount they use. Currently, they don't pay anything.
The problem, it seems, has more to do with trust and accountability than water. Like Greece, citizens of Ireland are being asked to tighten their belts and shed government protections in the name of austerity. Being presented with a bill for their water is the last straw. They do not trust the government to charge them for water, while ironically they do trust it to provide it for free.
Hongkongers, unlike Dubliners, have long had water meters and have paid according to usage. Before 1995, water prices covered the costs of delivering water. Since then, however, fee levels have remained unchanged, despite increases in the costs of providing water. This cannot continue, and the longer a rate increase is delayed, the more difficult will be the inevitable adjustment.
Costs climb, and not just because Guangdong province is charging more for the water from the Dongjiang, our largest source. Wages rise. Ageing systems cost more to maintain. And delivery to new and ever more remote development sites adds to the bill.
Yet the Legislative Council has consistently refused to increase water tariffs. The result: the Water Supplies Department has run an operating deficit for the past 20 years.
For the average user, the true cost of water is hidden. In 2013-14, revenues paid directly by users from water fees accounted for only one-third of current costs. The remainder comes from property rates and government subsidies.