The water price adjustment is getting more and more attention, water quality issue is becoming more and more serious and has attracted great concern of whole society. Alternatively, invited by ChinaWaterNet, Dr. FU Tao, Director of Water Policy Research Center of Tsinghua University, has given a penetrated interpretation on water price.
Generally speaking, there are five key reasons could account for this:
First, water companies, as increasing water supply cost, call for increasing water price to cover the cost. Why water supply cost witnesses an increase in recent years? Because in last few years, China has devoted to develop economy, in meanwhile a lot of environmental problems alternatively come out. Water quality has been seriously affected, for now, according to the official data, only 70% water sources are potable. Water is the basic need for human beings, therefore, safe water supply is necessary to promise the development of society and economy.
On the other hand, government has started to implement the new water standards where the indicators amounted to 106 from earlier 35, which will be prosecuted in 2012. As implementation of more strict water quality standards, it requires the water supply companies to take effective measures, infrastructure upgrade and rehabilitation for example, to achieve the standards and eventually address the potential problems likely to affect water quality.
Second, increasing requirement on wastewater treatment.
As to 2010, in accordance with expectation of government, rate of treated wastewater should reach 70%-80% in urban area, and more stricter standards to 36 key cities with full treatment of wastewater. Decades ago, there was no wastewater treatment charge covered in water price, therefore, water price could keep at a lower level. According to the international experiences, the cost of wastewater treatment is practically equivalent to water supply cost, in order to cover the cost of water companies and improve quality of tap water, wastewater treatment charge is a must.
Theoretically speaking, wastewater treatment cost should be paid by the polluter, “who pollute, who paid”. It implies that not only the industrial polluters should be charged, but also the household wastewater dischargers, the residents, because when they use tap water from water supply distribution network, while discharge it into the public sewer, therefore, the residents should pay for their used water and discharged water.
Third, sludge treatment. It does not means that the by-product of wastewater treatment is also get a safe identification, but transferred into sludge. It has not won certain notice for this question, even in big cities like Beijing and Shanghai that leave 70-80% sludge without stabilization treatment, and the pollutants will get into waterways blended with rain water, that bring a great potential risk for water quality. Wastewater treatment charge has been lingering at a lower level for a long time while sludge treatment charge is not yet collected from water consumers and wastewater dischargers. Virtually, a rational water price should cover both water supply and wastewater treatment.
Fourth, prices for resource products have been increased. National Commission of Development and Reform has, for many times, suggested to reform the price setting mechanism for resource products, where water has been included. Water is now regarded as a strategic resource worldwide, which drives the water resource fee rising sharply. At present, this part of fees, in China, has been collected in name of fee, and the collected money flow into local government revenue.
Fifth, efficiency factor. As known, water supply sector is one of the sectors that reformed lately, specifically, the responsibilities has not been clearly defined yet, resulting in the inefficiency of water supply companies. On the other hand, the cost-constrain mechanism has not been completed, accelerating the gap between cost and price.
