Hong Kong water supply

More money drains away in Hong Kong water deal

Agreement to pay Guangdong HK$14.4 billion over the next three years, irrespective of how much of the supply used, is not in the consumer’s interest

PUBLISHED : Saturday, 25 November, 2017, 1:28am
UPDATED : Saturday, 25 November, 2017, 1:28am

It is disappointing that the city’s much-criticised water supply deal with Guangdong has been extended at an even higher price. The agreement, which makes people pay a total of HK$14.4 billion in the next three years even if they do not use as much water as assumed, is hardly in the consumer’s interest. Officials need to explore more cost effective measures to meet our water needs.

That the government has failed to seize the opportunity to secure a better deal is to be regretted because various comparisons have shown that our cost is unjustifiably higher. For instance, our purchase cost is HK$5.8 per cubic metre this year, compared to about HK$1 for cities in Guangdong, according to data put before the legislature.

Adding to the dismay is a 7 per cent rise in the total cost. Under the lump-sum approach adopted since 2006, the city has to pay the agreed price even if the actual water supply from the Dongjiang, or East River, does not reach the annual 820 million cubic metres as guaranteed. Billions of dollars have been drained away in the past as a result.

HK$14.4 billion a year for water: can Hong Kong strike a better deal on supply from mainland China?

The authorities maintain the arrangements make the water supply reliable but, be that as it may, few people would pay for what they do not use. It is not just unfair from a consumer’s point of view. It also fuels cross-border tension and wastes natural resources.

Currently, the city’s water tariffs are still relatively low because of heavy government subsidies, yet adjustments have been long overdue. The costlier deal will only add to the pressure for an increase, which will ultimately be borne by households and businesses.

Officials said the Guangdong side had agreed to review the approach to agreements beyond 2020, including the feasibility of introducing a variable sum on top of a basic fixed supply. Welcoming as it is, it underlines the unfairness that the city has been suffering in the past decade.

Our long reliance on the mainland for necessities such as food and water supply mean we have little bargaining power in making agreements. But as a consumer, we have every right to negotiate for a better deal. The government needs to defend the city’s interest and fight for more favourable terms for the people. We should also explore other ways of enhancing the water supply in the longer term.