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Cheung Chi Fai

Hong Kong is set to pay about 20 per cent more for its water imports from across the border as part of a new deal signed with Guangdong, but it is unclear whether it will translate into higher costs for consumers.
Water bills for Hongkongers have not changed since 1995 and are among the cheapest in the world. A review of pricing now in progress will not be completed before the end of the year.
Under the three-year deal with Guangdong - which supplies 80 per cent of the city's water - a ceiling set on water imports will not change but the payment for the water will climb from HK$11.2 billion to HK$13.4 billion between next year and 2017.
That translates into an annual lump sum payment of up to HK$4.7 billion, which represents an increase of about 6.6 per cent in each of the three years, compared to the previous deal.
An official said the deal was "reasonable", citing inflation, rising costs and the stronger yuan.
The cost of the cross-border water supply from the Dongjiang, a tributary of the Pearl River, surged by at least 63 per cent between 1998 and 2012.
The water department registered a deficit of about HK$1 billion last year after subsidising users for 87 per cent of the cost.
The official said the department had discussed the possibility of switching to a scheme under which the city paid only for the amount of water drawn instead of the current scheme where it pays for a fixed amount no matter how much is used.
But he believed in the end the change would prove more costly than the present arrangement and expose the city to risks of supply interruption.
He said a pay-as-you-draw approach would put Hong Kong at a disadvantage in the competition for water resources between the numerous cities in the Pearl River Delta.
The new deal will allow the city to continue to draw up to 828 million cubic metres of water a year from the Dongjiang through a 23km pipe.
Past records show the city rarely hit the import ceiling. Last year Hong Kong imported about 600 million cubic metres, against total consumption of 935 million cubic metres.
The deal will bring the cost per cubic metre of untreated water from the Dongjiang past the HK$5 mark.
Dr Man Chi-sum, an adviser to the government on water resources, said the city lacked bargaining power in negotiating over water.
"Before we can buy less water from the mainland, we must do our best in water conservation, and explore new sources of water," he said.
Dr Lam Pun-lee, an economist, said water tariffs must be increased to discourage waste, and desalination capacity should be expanded.
The department is now conducting a feasibility study into building a desalination plant in Tseung Kwan O able to meet 5 per cent of freshwater needs.
 


Hong Kong to pay 20pc more for Guangdong water; impact on bills unclear

Hong Kong is set to pay about 20 per cent more for its water imports from across the border as part of a new deal signed with Guangdong. Photo: Felix Wong

News

Hong Kong

Deal with Guangdong reflects stronger yuan; impact on household bills is as yet unclear


Hong Kong is set to pay about 20 per cent more for its water imports from across the border as part of a new deal signed with Guangdong, but it is unclear whether it will translate into higher costs for consumers.
