Hong Kong to spend HK$15 billion over three years for water from mainland China - South China Morning Post

Hong Kong to spend HK$15 billion on fresh water from mainland China over next three years | South China Morning Post
Hong Kong environmental issues Learn more

Hong Kong to spend HK$15 billion on fresh water from mainland China over next three years

- New three-year deal for water from the Dongjiang in Guangdong province has highest annual price increase since 2018
- Hong Kong officials say new figure takes into account exchange rate between renminbi and Hong Kong dollar

Hong Kong will need to spend HK$15 billion (US$1.9 billion) over the next three years to buy fresh water from mainland China under a new deal which includes an annual 2.39 per cent price rise, the highest rate since 2018.

The Development Bureau revealed on Wednesday that the three-year contract between Hong Kong and mainland authorities for water from the Dongjiang, or East River, in Guangdong province would run from January 1 until the end of 2026.

Water prices will rise by 2.39 per cent annually from 2024 to 2026, up from the 1.33 per cent a year used between 2021 and 2023.

The annual rate of increase was 0.3 per cent between 2018 and 2020.

A government spokesman said the new rate took into account changes in the price indexes of Guangdong and Hong Kong and the exchange rate for the renminbi and Hong Kong dollar.

Secretary for Development Bernadette Linn Hon-ho on Wednesday signed the new agreement with Wang Lixin, director general of the Water Resources Department of Guangdong province, in Guangzhou.

“We are very grateful for the nation’s support for Hong Kong,” Lin said.

“The continuous supply of Dongjiang water since the 1960s has helped Hong Kong to solve the long-term problem of water shortage.

“Dongjiang water currently makes up about 70 to 80 per cent of fresh water consumption in Hong Kong, meeting the needs of people’s livelihoods and social development.”

The rest of Hong Kong’s supply of fresh water comes from rainfall.

Dongjiang water comes from the Taiyuan Pumping Station in Dongguan city and is discharged into the Shenzhen Reservoir before it is piped to Hong Kong.

Flooding, road subsidence from burst water pipe disrupt traffic on Hong Kong Island

Hong Kong reached a new deal with mainland authorities in 2020, which allowed the city to pay only for the actual amount supplied until 2029.

Major features such as water quantity, quality and prices are reviewed and adjusted every three years.

It was agreed in 2020 that the annual supply ceiling of 820 million cubic metres of Dongjiang water would be retained and that water prices would rise by 1.33 per cent annually between 2021 and 2023.

But in 2021 the actual price remained the same as 2020’s amid the pandemic.

Hong Kong is committed to also buying a maximum of 820 million cubic metres of Dongjiang water a year between 2024 and 2026.

The figure is close to the city’s actual consumption of 810 million cubic metres in 2022 and 811 million cubic metres the year before.

Hong Kong to pay only for water supplied under new Guangdong deal

Based on the commitment, the annual ceiling water price will be adjusted to HK$5.13 billion, HK$5.25 billion and HK$5.38 billion respectively.

The new annual 2.39 per cent increase is the highest since the three years between 2018 and 2020 where the rate of 0.3 per cent was adopted.

The rate ranged from 6.36 per cent to 6.65 per cent from 2015 to 2017.

The annual ceiling water price from 2021 to 2023 was HK$4.88 billion, HK$4.95 billion and HK$5.01 billion respectively.

Under the deal, if the actual consumption of the water is lower than the maximum amount, there will be a reduction in the payment.

The updated unit rates for such a deduction from 2024 to 2026 will be adjusted to 31.5 HK cents, 32.3 cents and 33.1 cents respectively for each cubic metre of water.

The Hong Kong authorities said the new agreement also specified that Guangdong would ensure the quality of the water supplied was compliant with Type II waters in the Environmental Quality Standards for Surface Water, which is “the highest national standard for surface water applicable to human consumption”.

The Development Bureau will also organise a series of events designed to teach the public about the history of Dongjiang water in Hong Kong in celebration of the 60th anniversary of the first supply deal.

Lawmaker Tony Tse Wai-chuen, who represents the architectural, surveying, planning and landscape sector and chairs the legislature’s development panel, said the new rate was reasonable.

“The new rate of around 2 per cent is not high,” he said.

“They mainly take into account the exchange rate, instead of the operating costs which have increased in the past few years.”