The annual increase rate was 0.3 percent between 2018 and 2020.
A government spokesman said the new price took into account changes in price indices in Guangdong and Hong Kong and the exchange rate of the renminbi and the Hong Kong dollar.
Development Minister Bernadette Lin Hon-hu on Wednesday signed the new agreement with Wang Lixin, director-general of the Water Resources Administration of Guangdong Province, in Guangzhou.
“We are very grateful for the nation’s support for Hong Kong,” Lin said.
“The continuous supply of Dongjiang water since the 1960s has helped Hong Kong solve the long-standing problem of water shortages.
“Dongjiang water currently accounts for about 70 to 80 percent of Hong Kong’s fresh water consumption, meeting the needs of people’s livelihood and social development.”
The rest of Hong Kong’s fresh water supply comes from rainfall.
Dongjiang’s water comes from Taiyuan Pumping Station in Dongguan City and is drained into a Shenzhen reservoir before being piped to Hong Kong.
Floods and collapsed roads due to burst water pipes disrupted traffic on Hong Kong Island
Floods and collapsed roads due to burst water pipes disrupted traffic on Hong Kong Island
Hong Kong reached a new agreement with mainland authorities in 2020, which allowed the city to pay only for the actual quantity supplied until 2029.
Key features such as water quantity, quality and prices are reviewed and revised every three years.
It was agreed in 2020 to maintain the annual supply ceiling of 820 million cubic meters of Dongjiang water, and for water prices to rise by 1.33 percent annually between 2021 and 2023.
But in 2021, the actual price remained the same as in 2020 amid the pandemic.
Hong Kong is also committed to purchasing a maximum of 820 million cubic meters of Dongjiang water annually between 2024 and 2026.
This figure is close to the city’s actual consumption of 810 million cubic meters in 2022 and 811 million cubic meters in the previous year.
Hong Kong will only pay for water supplied under the new Guangdong deal
Hong Kong will only pay for water supplied under the new Guangdong deal
Based on this commitment, the annual water price cap will be revised to HK$5.13 billion, HK$5.25 billion, and HK$5.38 billion, respectively.
The new annual increase of 2.39 percent is the highest since the three years between 2018 and 2020, when a rate of 0.3 percent was adopted.
The rate ranged from 6.36 percent to 6.65 percent from 2015 to 2017.
The annual maximum water price from 2021 to 2023 was HK$4.88 billion, HK$4.95 billion, and HK$5.01 billion, respectively.
Under the deal, if the actual water consumption is less than the maximum, the amount paid will be reduced.
The updated unit rates for this rebate will be revised from 2024 to 2026 to 31.5 Hong Kong cents, 32.3 cents and 33.1 cents, respectively, per cubic meter of water.
The new agreement also specifies that Guangdong province will ensure that the quality of water supplied is compliant with Type II water in the Environmental Quality Standard for Surface Water, which is “the highest national surface water standard applicable to human consumption,” Hong Kong authorities said. .
The Development Office will also organize a series of events designed to teach the public about the history of Dongjiang Water in Hong Kong to mark the 60th anniversary of the first supply deal.
Lawmaker Tony Tse Wai Chuen, who represents the architecture, surveying, planning and landscape sector and chairs the legislature’s development committee, said the new rate was reasonable.
“The new rate of about 2 percent is not high,” he said.
“It mainly takes into account the exchange rate, rather than operating costs which have increased in the last few years.”