MR CHAN KIN-POR (in Cantonese): Deputy President, last month I joined the Legislative Council delegation to visit the water supply facilities in the Dongjiang River Basin. We were impressed by the visit. I have drunk Dongjiang water for years, but it was the first time I saw the situation of Dongjiang in person. I saw that the Mainland has put in a lot of efforts to safeguard water quality and we are satisfied with their work. Furthermore, according to reports, the water quality meets the highest standard. This duty visit to the Dongjiang River Basin reminds me of the implementation of water rationing in Hong Kong when I was small. This is a collective memory of Hong Kong people. With a stable water supply, water rationing has not been imposed in Hong Kong since the 1980s. Hence, the “post-80s” may not have experienced such a plight.
The motion today urges the Government to revise the approach of purchasing Dongjiang water, switching from the “package deal lump sum” approach to a “quantity-based charging” approach. At present, the Government is holding negotiations with the Mainland on the Dongjiang Water Supply Agreement for the next three years. I certainly hope that the Government will be able to secure an agreement with more favourable terms. It will be good for us if lower prices can be agreed. However, we must be cautious not to gain little only to lose a lot. We can see that water prices have risen over the past 11 years but we must also understand that there have been fluctuations of inflation rates and exchange rates as well as substantial investments made by the Mainland in safeguarding water quality.
Over the past 11 years, the price of Dongjiang water has risen from $2,490 million in 2006 to $4,490 million in 2016. Looking at the price from the perspective of figures only, it is an increase of 80%, with an average annual cumulative increase of 6%. However, the Renminbi (“RMB”) has risen over 10% in the same period. We pay by exchanging Hong Kong dollars to RMB, and thus, a depreciation is recorded. If the factor of exchange rates is netted off, the price of water should be $2,560 million in 2006 and $3,850 million in 2016, with an actual increase of 50%, and an average annual cumulative increase of about 4%.
The increase of water price of 50% is that of the book value only. The inflation factor of the Mainland has not been netted off in this figure. The cumulative inflation rate in the Mainland in the same period is 35%. Meanwhile, the factor of a rise in the operational cost should also be netted off. The actual figure has yet been calculated by the Government but the increase over the past 11 years is definitely much lower than 50%.
Apart from the book value, we should look at some actual costs at well. I believe Members who participated in this duty visit will not oppose to the view that the Mainland is genuinely serious about the issue of safeguarding water quality to the extent that huge amounts of resources have been invested in this respect. The six cities in the Dongjiang River Basin have invested a total amount of about $42 billion over the past years to improve the water environment. As for Hong Kong, apart from paying for the water price, it need not pay any extra fees for the protection of water quality. Moreover, we may easily ignore the fact that development of the land along the Dongjiang is not allowed. It is claimed that the area of land involved is at least 70 sq km. The past decade was the golden decade of development in the Mainland, be it economic development or real estate development. If these costs are included in the calculation, the price they pay is very substantial. Thus, when we see the increase of water price, we have to understand that the cost they pay is very substantial as well.
Moreover, some Members hold the view that switching from the “package deal lump sum” approach to a “quantity-based charging” approach will be beneficial to Hong Kong. This is wishful thinking only. As a matter of fact, these are promotion and marketing tactics. Discounts are always available in the “package deal lump sum” approach. In fact, charges based on the “quantity-based charging” approach may be more expensive. Furthermore, the biggest problem with the “quantity-based charging” approach is that it will not guarantee the quantity of water supply. In the event of a drought, when Guangdong Province does not have sufficient water for its own use, the Mainland does not have the obligation to guarantee a sufficient supply of drinking water to Hong Kong. Does it mean that water rationing has to be implemented again in Hong Kong by then? There are often anomalies in our weather in recent years. It is not surprising at all if there is going to be a massive drought.
With respect to the proposal of seawater desalination, I agree that it is worth our examination and implementation as the Mainland also faces the same problem of water shortage. In the event that water supply is not sufficient, we still have desalination as a reserved water resource for emergency use. At the present stage, this resource is suitable for support or reserve option only. The cost of seawater desalination is high. According to the estimation of the Government, the cost is double the price of Dongjiang water. While Hong Kong people are health conscious, the problem of seawater pollution is very serious as there are all sorts of chemicals in seawater. Even if it is desalinated and filtered, is it suitable for prolonged human consumption? What impact will it have on human beings in the long run? As a matter of fact, we do not know the answers to such questions yet.
Just as I mentioned above, the Government is now holding negotiations with the Mainland on the Dongjiang Water Supply Agreement for the next three years. I hold the view that we can fight for more favourable terms. For instance, we can estimate the annual demand of water more accurately, with a view to slowing down the increase of water price. Moreover, the Government should promote water conservation and proper control of water mains leakage, thereby ensuring drinking water will not be wasted on all fronts.
I so submit.