Shenzhen plans sharp increase in water rates

Shenzhen will raise water prices in a bid to ease shortages, with households facing a rise of 30 per cent and businesses more than 60 per cent if the proposal is approved this month.

The increase is bound to face strong opposition in the city, where many Hongkongers live or have businesses.

Li Yuet-leong, chairman of the Hong Kong Electroplating Merchants' Association, said his industry would suffer.

'It will only hurt our business,' he said. 'The water price generally is about 8 per cent of our operating cost. Now the authorities ask for a 60 per cent increase. It will just eat up our slender profit.'

A public hearing on the proposed price rise will be held by the Municipal Development and Reform Commission on January 21, The Southern Metropolis News reported.

Guangdong is struggling with its worst drought in decades. There have been reports that the severe drought that began in the summer slashed the province's rice harvest and cut farmers' incomes by one-third. Reservoirs, ponds and wells across the province, which provide drinking water to millions of residents, have dried up.

The price for industrial water use would rise 64.4 per cent from 2.25 yuan (HK$2.55) to 3.70 yuan per cubic metre. The price for residential use would rise almost 32 per cent from 2.85 yuan to about 3.75 yuan, but families would pay more for greater consumption. The unit price would rise to 5.20 yuan for amounts exceeding 30 cubic metres a month.

Shenzhen officials decided the price rise was necessary to ensure profits of at least 6 per cent for water supply groups. The Shenzhen Water Affairs Group said an increase was needed due to equipment investments and internal administrative costs.

Li, of the merchants association, doubted whether the rises could be stopped, but said he hoped the increases could be introduced in phases over the next few months so small and medium-sized enterprises could adjust.

One resident complained that it was not normal to make water so expensive, though the government would offer subsidies to low-income families to ensure their standard of living was not affected.

'A 30 per cent increase is too high,' Tang Ying, a Shenzhen resident, said. 'It's not just a water price problem. All public services can ask for such a high price increase tomorrow if we say yes to this today. Why must the public pay the water departments for a 6 per cent profit? It should be non-profit as a public service.'

The city's water price - even after the increases - would still be reasonable compared with other urban cities, officials said.

The average water price for 35 large cities on the mainland is about 3.77 yuan per cubic metre. Beijing held a hearing last month, planning to raise water prices for residential use by about 24 per cent, from 3.7 yuan per cubic metre to 4.6 yuan.

Since June, Shanghai has raised the water price for residents by at least 40 per cent on average to about 2.3 yuan. The city will raise the price to 2.8 yuan in November.

A number of other cities are also planning to or have raised water prices, such as Tianjin, Shenyang , Guangzhou, Nanjing and Chongqing .

Over the past 12 months, all public hearings on residential water price increases have ended with rises, generating public controversy.