Hong Kong will continue to make lump sum payments for its water for the next three years – to the tune of HK$14.41 billion. That is about 7 percent more than the total cost for the past three years.
The government presented the figures to the Legislative Council yesterday.
Under the current agreement the annual costs were HK$4.2 billion (2015), HK$4.49 billion (2016) and HK$4.778 billion (2017).
In the new deal – to be signed next month – the annual costs will be HK$4.79 billion, then HK$4.8 billion and HK$4.82 billion, meaning the government has to pay HK$10 million more for importing Dongjiang water next year.
According to the government, the higher costs reflect higher operation charges, yuan-Hong Kong dollar exchange rate and "relevant price indexes" in both Hong Kong and Guangdong.
The new agreement retains the "package deal lump sum" approach which has been adopted since 2006, according to the government. This requires Hong Kong to pay in full for 820 million cubic meters of Dongjiang water per annum, regardless of the actual quantity used.
The Guangdong authorities said Dongjiang water is also an important source for several other cities including Heyuan, Huizhou, Dongguan, Guangzhou and Shenzhen. These cities have been developing rapidly, giving Hong Kong greater competition for Dongjiang water.
The provincial authorities say Hong Kong may need to pay more under a "payment on actual supply quantity" approach as Guangdong may have to make an allowance for the uncertainty in the quantity supplied to ensure a reasonable income. Both sides have agreed to review the current payment approach after an overall study in 2020.
Lawmakers expressed disappointment with the current payment system. Democratic Party lawmaker Helena Wong Pik-wan said: "The price has now risen rather than dropped … it will be 7 percent more expensive than the last three-year agreement."
Lau Kwok-fan of the Democratic Alliance for the Betterment and Progress of Hong Kong said residents only used about 700 million cubic meters of water annually in the past 10 years. He suggested the government leave the annual supply at 700 million cubic meters, and charge for water used beyond this amount.
