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Source: Hong Kong Information Services

Hong Kong and Guangdong today signed the new agreement on supplying Dongjiang water to Hong Kong from 2021 to 2023, which will introduce a water price deduction mechanism.

The pact was signed by Secretary for Development Michael Wong and Guangdong Department of Water Resources Director General Wang Lixin at a ceremony held online.

Under the new agreement, the previously adopted “package deal lump sum” approach is enhanced to a “package deal deductible sum” approach in which the water price will be deducted according to the actual amount of Dongjiang water supplied.

The annual ceiling water price will be subject to the deduction of a sum to arrive at the annual actual water price. That sum is arrived at by multiplying a unit rate to the difference between the annual supply ceiling and the actual amount of water supplied.

This means the actual water price to be paid should be lower than that under the existing “package deal lump sum” approach.

The new approach addressed the public’s requests for payment based on the quantity of Dongjiang water supplied.

It should be maintained at least up to 2029. It is estimated that under the mechanism in the new agreement, based on the 2021 price level, the maximum saving within this nine-year period is $324 million.

The water prices in the new agreement will be increased by 1.33% annually.

In view of the prevailing challenging economic environment arising from the COVID-19 epidemic, Guangdong further agreed that the actual water price for 2021 is to be frozen at the 2020 level to ease Hong Kong’s financial burden.

Mr Wong also held a working meeting online with the Guangdong authorities to exchange views on the Dongjiang water supply and water quality monitoring work.

MIL OSI Asia Pacific News