Water Charges

Water consumers in Hong Kong pay less for high quality fresh water than their counterparts in most major cities around the world. Water charges have not been revised since February 1995.

Scale of Charges

Fresh water for domestic use (other than flushing) is charged at four-month period rates set out in a four-tier system as follows.

Waterworks operations have seen deficits since 1998-99 which means that it is subsidised by general government revenues. In 2013-14, the deficit was $930.0M and the cost recovery rate was 89.1%. The Government is conducting a review of water charges which is expected to be completed in 2014, taking into consideration a number of factors, including the affordability, financial performance of waterworks operations, the prevailing economic situation and the views of Legislative Council members. Any proposal for a change of the water tariff structure and/or charging levels must be taken to the Executive Council and, if approved, then sent to the Legislative Council to undergo the legislative process.

Other than water charges, there are 25 statutory fee items stipulated in the Waterworks Regulations (Cap. 102A). We have been periodically reviewing these fee items in accordance with the Government-wide “user pays” principle which aims to recover the full cost of providing services. During the year, 24 statutory fee items have been revised effective from 1 August 2013 and all 25 statutory fee items will be further revised effective from 1 January 2015.

Profiles of the Revenue from Water Charges

During the year 2013-14, about 14 per cent of domestic customers were not required to pay water charges, 42 per cent were paying up to the tier 2 rate of $4.16 per unit, 20 per cent were paying up to the tier 3 rate of $6.45 per unit and only 24 per cent were paying up to the tier 4 rate of $9.05 per unit. For the 2.6 million domestic customers, the average water charge in 2013-14, including those not required to pay any charge, was $47 per month. According to the Census & Statistics Department household expenditure survey, the water charge amounts to about 0.3 per cent of the average monthly household expenditure.

An analysis of the water charges by sector over the past five years is as follows:

Analysis of Revenue and Expenditure

The revenue collections include chargeable water supplies, fees, licences, and reimbursable work. In preparing the Waterworks Operating Accounts which present the financial results and positions on an accrual accounts basis, the revenues include non-cash items, mainly contribution from rates, contribution from free allowance, and water supplies for government usage. The total operating costs include mainly staff costs, purchase costs of Dongjiang water, depreciation, operating charges, plus administration and other expenses. An analysis of the revenue and expenditure over the past five years is as follows:

The Department is committed to providing services as cost effectively as possible. We have made substantial investments in fixed assets, equipment, information technology and human resources to improve operational efficiency and staff productivity to meet the demands for a higher quality of services by the public. Our customers and the public at large can rest assured that we will exercise strict financial discipline and be very cost conscientious in delivering our quality services to meet the demand of our customers. This is our underlying approach in achieving our vision and missions.