Following is a question by the Hon Fred Li Wah Ming and an oral reply by the Secretary for the Environment, Transport and Works, Dr Sarah Liao, in the Legislative Council meeting today (February 26) :-
Question:
Regarding the purchase of Dongjiang water, will the Government inform this Council:
(a) whether it has reached an agreement with the Guangdong Authority on the price of water for 2001, 2002 and 2003; if not, of the reasons for that and the progress of the discussion on this issue between the two sides, and whether it has asked the Guangdong Authority to lower the price of water;
(b) as the 1989 Water Supply Agreement is due to expire next year, whether it has assessed the annual water demand and made a forecast on the rainfall of Hong Kong over the next 15 years; if so, of the basis of the assessment and forecast and the results; and
(c) whether it will consider changing the basis adopted for calculating the quantities of water to be purchased, which is "the rainfall in a serious drought of one in fifty years", with a view to reducing the quantities of water purchased and avoiding wastage?
Reply:
Madam President,
(a) According to the 1989 Water Supply Agreement, the price of water is determined through consultation between the governments of Guangdong Province and Hong Kong. The adjustment range depends on the increase in operational costs and takes into account the relevant price indices of the two places and movements in the exchange rate between Hong Kong Dollar and Renminbi.
In the negotiations in recent years, we repeatedly and strongly urged the Guangdong side to lower the price of water on the grounds that both Guangdong Province and Hong Kong were facing deflation. However, the Guangdong side requested that the price be raised, believing that the continuous development of the Guangdong economy had led to a corresponding increase in operational costs. The Guangdong side also cited the rise in expenditure on water resource protection as a factor of the increase in costs. We have not reached an agreement yet with the Guangdong side on the price of water for 2001-2003.
Notwithstanding this, we will sustain our effort in negotiating the price of water with the Guangdong side. However, just as any other contracts, an agreement can only be reached if there is a consensus between the two parties. Furthermore, the Guangdong side has requested that the supply quantities and flexible supply arrangements be considered together with the price of water. In discussing these matters, we will certainly bear in mind the overall interest of Hong Kong, and strive for a reasonable agreement acceptable to both sides on the price and supply quantities of water.
(b) In 1998, the governments of Hong Kong and Guangdong Province agreed to reduce the annual increment in the supply quantity for 1998-2004, i.e. 560 million cubic metre (mcm) in total, and discuss the annual supply quantities from 2005 onwards through further negotiations. Based on the latest information on our population, industry and commerce and economy, the annual growth rate of water demand in the next 15 years is estimated to be a marginal 0.6% on average. In other words, the water demand will increase from 950 mcm in 2003 to 1,030 mcm in 2017.
It is impossible to forecast rainfall accurately. In assessing our long-term water resources, the average catchment yield (295 mcm per annum) has been adopted. The catchment yield, in turn, has been projected on the basis of the average annual rainfall (2,214 mm per annum) of a number of years. On the other hand, we need to adopt the scenario of a severe drought in determining the quantities of Dongjiang water to be imported since the occurrence of a drought cannot be predicted and the Hong Kong Government has the responsibility and need to ensure an adequate water supply to the community at all times. The catchment yield in a severe drought will be way below average, and the quantity of rainwater collected will be even smaller in a drought lasting for several years. To make provision against a severe drought, we therefore may not be able to fully utilize the water imported in a wet year.
(c) The annual rainfall of Hong Kong fluctuates a lot. According to the rainfall records kept by the Hong Kong Observatory since 1884, the highest annual rainfall of 3,343 mm was recorded in 1997 and the lowest annual rainfall of 901 mm in 1963. Basing on the rainfall and surface runoff data, we estimate that in a serious drought of one in fifty years, the surface runoff gathered in a year may only amount to 110 mcm. This, together with the 810 mcm of Dongjiang water, will barely meet the existing demand of 950 mcm per annum. In the case of a serious drought of one in a hundred years, the surface runoff gathered in a year may only amount to 70 mcm. When this is added to the 810 mcm of Dongjiang water, there will only be 880 mcm of water available. To meet our demand, the shortfall of 70 mcm of raw water will have to be drawn from the reservoirs and their storage level may drop below the alert level as a result.
An adequate supply of water is important to Hong Kong as a cosmopolitan city. Theoretically, we can, of course, purchase less Dongjiang water if we lower our drought-relief standard. But in that case Hong Kong would run a higher risk of water rationing, which means that the public would not be provided with freshwater 24 hours a day, and the economy of Hong Kong would be dealt a heavy blow.
In negotiating with the Guangdong Authority for an agreement on future water supply, the Hong Kong Government will carefully review the annual supply quantities according to the latest estimate of our freshwater demand. We will also seek to incorporate more flexible provisions into the agreement so that the quantities of raw water imported may be reduced in wet seasons and suitably increased in dry seasons. We hope that such provisions can ensure a 24-hour supply of water while reducing the possibility of the overflow of our reservoirs.
End/Wednesday, February 26, 2003
NNNN