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There is still plenty of room for further water price hikes in
China, despite a series of price rises by local governments since
late last year, experts said.
They also said the government should gradually reduce interference
in price setting and allow enterprises a bigger say in the sector.
The present mechanism is irrational and should be overhauled, said
Wang Guangqian, director of the Institute of River and Coastal Engineering
at Tsinghua University.
Price levels are not high enough to meet actual costs and enterprises
involved in the business still find it hard to support themselves.
"People still generally regard water as government welfare
work, but many water users should pay more,'' said Zhu Tan, a water
expert and also a deputy to the Ninth National People's Congress
(NPC).
Water prices should vary from region to region, customer to customer
and from business to business, other deputies said.
Further reform of the water pricing system was a common call from
deputies both from thirsty northern provinces and from water-rich
southern regions who attended the Fourth Session of the Ninth NPC,
which ended last week.
Higher water prices will trigger public awareness of the scarcity
of water and promote water saving, they said.
China is one of the countries in the world facing big water problems.
To get through the crisis, many domestic cities raised the price
of water for different users at the end of last year.
The Ministry of Water Resources also promised to continue to raise
prices gradually over the next five years to encourage water-saving
efforts and to ease supplies.
But not all is well, despite the price hike. Experts said efficient
management should be promoted and water supply should be treated
as a business. The government needs to break the monopoly and introduce
more market competition in the sector, they added.
"Water should be more commercialized,'' said James Gao, chief
representative in Beijing of the Paris-based Suez Group, the former
Suez Lyonnaise des Eaux and one of the world's biggest water service
providers.
Water prices in China often ignore business implications.
Price levels should reflect the full cost of supply, including distribution,
management and waste treatment, said Gao.
Waste treatment fees, for example, should be raised and added in
the price of water.
Moreover, the government should change from being a water provider
to a regulator, he said.
Gao urged the breaking up of the State water monopoly, which covers
areas such as waste treatment and distribution.
Involvement of private firms will greatly help ease the financial
burden for the government and increase efficiency, experts said.
Most importantly, the measures will help shape a new water price
mechanism which will see a drop in water prices in the long run
and better services as more competition, higher efficiency and better
management will ultimately reduce costs, Gao said.
(China Daily 03/21/01)
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