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Hong Kong strikes new water import deal with mainland China, paying only for amount supplied

  • New ‘package deal deductible sum’ agreement with Guangdong province for water from the Dongjiang, or East River, covers the years 2021-23
  • Up to 80 per cent of city’s water comes from Dongjiang, with city paying for fixed ceiling of 820 million cubic metres each year under previous deal

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Most of Hong Kong’s drinking water comes from the Dongjiang. Photo: SCMP
Zoe Low

Hong Kong has reached a new water import deal with mainland Chinese authorities, with the city now able to pay only for the actual amount supplied, saving an estimated HK$324 million (US$42 million) over nine years.

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The new “package deal deductible sum” agreement with Guangdong province for water from the Dongjiang, or East River, for 2021-23 was signed by Secretary for Development Michael Wong Wai-lun on Monday. Water prices are set to increase 1.33 per cent annually to account for the exchange rate between the Hong Kong dollar and renminbi.

The city expects to maintain the new import deal for up to nine years, until 2029.

“The approach enables reliable water supply to be maintained – even under extreme drought conditions with a return period of once in 100 years,” a government statement said, adding that the Guangdong authorities had agreed 2021 prices would be frozen at 2020 levels because of the economic difficulties caused by the coronavirus pandemic.
Hong Kong will have a reliable water supply even under extreme drought conditions, the government says. Photo: Photothek via Getty Images
Hong Kong will have a reliable water supply even under extreme drought conditions, the government says. Photo: Photothek via Getty Images
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The government estimated it would pay no more than HK$4.82 billion (US$622 million) in 2021, the same as this year. With price increases over the next three years it would pay up to HK$5.01 billion (US$646 million) in 2023 for the maximum amount of water, 820 million cubic metres.

Up to 80 per cent of Hong Kong’s water is imported from the Dongjiang and a previous “package deal lump sum” agreement struck in 2006 saw the city paying for the fixed ceiling of 820 million cubic metres each year. The deal was often criticised as unfavourable as Hong Kong usually only imported about 700 million cubic metres on average annually over the years.

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