Think Tank calls for rethink of water governance to cure wastefulness

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Up to one-third of the city’s freshwater, or HK$1.35 billion in revenue, could be lost through leakage and theft.

(Photo: From left – Dr Fredrick Lee, Associate Professor at the Department of Geography, HKU; Evan Auyang, Chairman of the Board at Civic Exchange; and Sam Inglis, Environmental Research Analyst at ADM Capital Foundation.)

While Hong Kong lawmakers have been urging the government to re-examine its increasingly expensive water deal with Guangdong province, a new research suggests that it is Hong Kong people’s misconception and wastefulness, rather than just the pricing mechanism, that have costed the city billions per year unnecessarily.

Under the current 2006 agreement, the government pays a lump sum to the state-owned Guangdong Investment for 820 million cubic meters of water per year. The annual payment has increased by almost 100% from about HK$2.5 billion in 2008 to HKD4.78 billion this year despite only reaching the ceiling once in the past 10 years. Five out of eight cities fed by the Dongjiang – or East River – water supply, namely Heyuan, Huizhou, Dongguan, Guangzhou and Shenzhen, are paying substantially less although having higher total consumption than Hong Kong. It was under these circumstances that some lawmakers called to renegotiate the deal to pay by volume as the current agreement will expire by the end of 2017.

According to a research paper published by independent think tank Civic Exchange and The ADM Capital Foundation, however, a significant proportion of the expense could have been avoided with better water governance. Titled, “The Illusion of Plenty: Hong Kong’s Water Security – Working Towards Regional Water Harmony”, this 127-page report argues that while the pricing mechanism is subject to debates, as Hong Kong is paying the ‘premium’ to secure a supply priority and 99.9% reliability, the government has to rethink water policy from a reliability-centred one to focus more on the conservation and sustainability side of the story.

“This importation and reliance of water from Dongjiang is creating an ‘illusion of plenty’,” said Evan Auyang, Chairman of the Board at Civic Exchange. “It’s not just the price we are talking about. You are paying to secure the supply. […] But at the end of the day, we are responsible in using that water.”


In deep water

The report criticised the government for making no commitment to diversify its water sources through water reclamation and seawater desalination and setting no water reduction target for the population.

Citing 2013 data from the Water Supplies Department, the report also found that almost one-third of the city’s freshwater could be lost through leakage of government mains (17%) and private pipes (15%). This would be equivalent to a loss of HK$1.35 billion in revenue, or the city’s entire local water catchment.

The report also called on the government to review its current water pricing regime which encourages “reckless overconsumption” to reflect the real cost of freshwater. Hong Kong’s average domestic water consumption per person per day is 21% higher than the global average, while people are paying substantially cheaper bills than in other developed economies.

As Dr Frederick Lee, Associate Professor at the Department of Geography, University of Hong Kong, put, a three-person household would have to pay 105% more if the charges are cost-recovering.

“Hong Kong is paying a high price for water because we choose to waste it,” Mr Auyang asserted.

It was claimed that the recommended measures, if realised by 2030, would potentially save 24% of Hong Kong’s projected annual freshwater demand and reduce Dongjiang’s contribution from currently 60-80% to 40-60% by 2030.

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