LookAtVietnam – The Ha Noi Water Supply Company yesterday, September 16, announced a proposal to increase the safe water fee in the city, in order to offset high production costs.

Ha Noi Water Supply Company employees wash down pipes at a water production plant. The company proposes to increase safe water fees to offset production costs.

Other changes include a new charge for water that is used for public services, which is currently free, but would cost VND4,700 per cubic metre if the proposal is approved.

Under the proposal, new water users would not have to pay for water pipe installation fees, which costs around VND1.5 million ($84), and would be able to have their water meter repaired free of charge. Currently, water users have to pay for all these fees.

The amount of safe water used by households accounts for 74 per cent of the company’s total commercial water production, with 61 per cent of households using less than 16cu.m per month.

The current price was applied by the company following Decision No 36/QD-UP of the Ha Noi People’s Committee. However, the decision did not help to make up for production costs, due to increases in electricity prices, salaries and other fees, said Deputy Head of the Price Section of the Ha Noi Financial Department Pham Ngoc Bao.

Increasing

The proposal was also aimed at increasing investment capital for the water supply network and drawing more investors to the production of safe water. Ha Noi is currently able to supply safe water to more than 38 per cent of its population, according to Bao.

Deputy Director of the municipal Department of Labour, Invalids and Social Affairs Do Thi Xuan Phuong said the increase in water prices was necessary, but it must be carried out carefully to avoid affecting the living conditions of local citizens. The proposal is scheduled to be submitted to the municipal People’s Committee for approval in October. The last rise in the company’s water price happened in 2005.

Meanwhile, the Sai Gon Water Supply Corporation (Sawaco) also proposed to raise water prices. Water prices currently range from VND2,700 to VND8,000 per cubic metre. Sawaco wants to increase the minimum price to VND4,500 and the maximum to VND13,000. Prices for individuals would continue to be based on the amount of water consumed.

Sawaco general director Tran Dinh Phu said the increase in water prices would leave Sawaco with capital to invest in reducing leaks and building new water-supply facilities.

Currently, an astounding 40 per cent of city water is lost to leaks. Sawaco aims to reduce that to 25 per cent by 2025, but would need VND5.7 trillion ($335 million) to do so. The current water price was set in 2004, while prices of other materials have increased in tandem with market developments over the past five years, Phu said.

Sawaco now supplies a total 1.3 million cubic metres a day to 82 per cent of the city’s households.

Several delegates from the HCM City People’s Council agreed in principle with the need to raise water prices, but said the new rates would need to be set carefully, in order to protect low-income consumers.

Regarding Sawaco’s proposal, Pham Phuong Thao, chairwoman of the HCM City People’s Council, petitioned the HCM City People’s Committee to carefully examine Sawaco’s proposed price framework.

Nguyen Van Dua, deputy secretary of the HCM City Party Committee, said it was time to raise water prices to secure further investments in water supply systems and water quality. He also urged Sawaco to strictly implement its plan to reduce water losses by 2025.

VietNamNet/Viet Nam News