Guest Comments by the Civic Exchange
(A Public-Policy Think Tank)

HONG KONG -- Raising the price of water is inevitable for Hong Kong to manage water resources better. So far, the local government hesitates to increase water tariffs due to expected resistance from legislators.

We believe it’s time for officials to disclose all the risks that Hong Kong faces and what it takes to ensure long-term water supplies for the entire Pearl River Delta (PRD), to which Hong Kong’s socio-economic circumstances are intricately tied. The health of the Pearl River Basin affects agriculture, power generation and industry, all areas of vital socio-economic importance.

Hong Kong shares its main water source with many others under an allocation plan. With rising demand among the users, everyone (including Hong Kong) must become much more efficient in water use.

China’s national policy promotes demand management with water tariffs raised continuously to show the true value of the resource and the cost of delivering water services. The price for water in Hong Kong should not remain unchanged as mainland cities continue to raise tariffs. Otherwise, Hong Kong (China’s richest city) will become an anomaly.

“Hong Kong people need to understand that water users on the mainland will pay more and more as a result of policy to improve water-resource management. When the current water-supply contract is renegotiated in 2011, the amount likely will be higher, and the price later higher still,” said Christine Loh, CEO of the Civic Exchange.

Under pressure from political parties, legislators and vested interests, the Hong Kong government may continue to heavily subsidize water charges. But for a city as rich as Hong Kong, it’s more appropriate for tariffs to reflect the true costs of delivering and treating scarce water.