7.8 Suggestions
171
Improving urban water supply tariff structure
In general, under a similar treatment process and the same water quality requirement,
the differences in the urban water supply tariff among cities are not significant,
compared to those for the water resources fee.
In terms of tariff regulation, the urban tariff increased rapidly from the 1980s to
around 2000. After 2005, water pricing reform has not focused on urban tariff regulation. Even after 2012, following the implementation of new drinking water quality
standards with 106 indicators, the urban water tariff was not increased significantly.
Therefore, in future, urban water tariff reform should emphasize tariff structure,
especially the following aspects.
Promoting non-residential plan-exceeding overcharge system
According to regional water resources availability and water supply cost, the differentiated and sector-focused plan-exceeding overcharge tariff should be designed
and applied to promote industrial structure upgrades through water resources
management.
Continuing promoting the implementation of the block tariff and improving
block and its tariff
Under current coverage, the block tariff should be applied to all cities and expanded
to towns. At the same time, a well-designed block tariff could handle several pricing
targets, such as both guaranteeing water use for low-income families and promoting
water use efficiency. Therefore, with the introduction of this block tariff, the urban
water tariff would almost be finalized. It is thus necessary to improve the block and
its tariff.
Instating service charge for wastewater collection and treatment tariff
Wastewater collection and treatment is a service. The charge on this kind of service
should be implemented according to the cost-recovery principle. Although it was
applied according to this principle when tariff collection began, as well as being
stipulated in legislation and policy documents, the wastewater tariff collection standard formulation and implementation have not ensured cost recovery. Consequently,
the revenue from tariff collection could neither recover wastewater treatment costs,
nor be levied as a service charge. Finally, in 2013, China separated tariff collection and use: the tariff is intended to cover costs, but is utilized and managed as an
administrative charge and with a governmental subsidy.
Although a difficult reform process lies ahead, in future, wastewater tariff reform
should reflect the cost-recovery principle and insist on service charges. The wastewater treatment tariff should be regulated according to the legal requirement and
increased gradually to cover the operational costs for treatment facilities and sludge
disposal, with the aim of eventually generating profits. With increasingly strict treatment and discharge standards being introduced to control pollution, the tariff should
be further increased.
171
Improving urban water supply tariff structure
In general, under a similar treatment process and the same water quality requirement,
the differences in the urban water supply tariff among cities are not significant,
compared to those for the water resources fee.
In terms of tariff regulation, the urban tariff increased rapidly from the 1980s to
around 2000. After 2005, water pricing reform has not focused on urban tariff regulation. Even after 2012, following the implementation of new drinking water quality
standards with 106 indicators, the urban water tariff was not increased significantly.
Therefore, in future, urban water tariff reform should emphasize tariff structure,
especially the following aspects.
Promoting non-residential plan-exceeding overcharge system
According to regional water resources availability and water supply cost, the differentiated and sector-focused plan-exceeding overcharge tariff should be designed
and applied to promote industrial structure upgrades through water resources
management.
Continuing promoting the implementation of the block tariff and improving
block and its tariff
Under current coverage, the block tariff should be applied to all cities and expanded
to towns. At the same time, a well-designed block tariff could handle several pricing
targets, such as both guaranteeing water use for low-income families and promoting
water use efficiency. Therefore, with the introduction of this block tariff, the urban
water tariff would almost be finalized. It is thus necessary to improve the block and
its tariff.
Instating service charge for wastewater collection and treatment tariff
Wastewater collection and treatment is a service. The charge on this kind of service
should be implemented according to the cost-recovery principle. Although it was
applied according to this principle when tariff collection began, as well as being
stipulated in legislation and policy documents, the wastewater tariff collection standard formulation and implementation have not ensured cost recovery. Consequently,
the revenue from tariff collection could neither recover wastewater treatment costs,
nor be levied as a service charge. Finally, in 2013, China separated tariff collection and use: the tariff is intended to cover costs, but is utilized and managed as an
administrative charge and with a governmental subsidy.
Although a difficult reform process lies ahead, in future, wastewater tariff reform
should reflect the cost-recovery principle and insist on service charges. The wastewater treatment tariff should be regulated according to the legal requirement and
increased gradually to cover the operational costs for treatment facilities and sludge
disposal, with the aim of eventually generating profits. With increasingly strict treatment and discharge standards being introduced to control pollution, the tariff should
be further increased.