Workshop Discusses Guidelines to Promote Sustainable Wastewater Services in PRC

National guidelines for the PRC on wastewater tariffs developed under an ADB technical assistance (TA) offer a blueprint for sustainable wastewater services in the country, the Country Director of ADB's PRC Resident Mission told a workshop today.

BEIJING, PEOPLE'S REPUBLIC OF CHINA (PRWEB) August 28, 2003 -- National guidelines for the PRC on wastewater tariffs developed under an ADB technical assistance (TA) offer a blueprint for sustainable wastewater services in the country, the Country Director of ADB's PRC Resident Mission told a workshop today.

"The national guidelines for wastewater tariffs provide incentives to improve urban wastewater management and to generate the funds that are necessary to finance wastewater infrastructure," Bruce Murray told the opening of the Workshop on the National Guidelines for Urban Wastewater Tariffs and Management.

Under the TA, a study was conducted to review international best practice and experience, and draw conclusions and lessons for the PRC.

The process involved a consulting team with international and national members, four case study cities, the Ministry of Construction (MOC), Ministry of Finance (MOF), National Development and Reform Commission (NDRC), and other government representatives in a series of workshops and discussions.

The case study cities were Chongqing, Zhangjiakou, Tangshan, and Changzhou. Fuling District in Chongqing was selected as a representative district town.

This process resulted in the development of the national guidelines for wastewater tariffs, supported by recommendations for sector reform. The guidelines will be submitted to the PRC State Council for approval.

Wastewater infrastructure is primarily financed from municipal sources, often with support from the national government or international multilateral, bilateral, and private sector sources.

The Government recognizes the importance of improved environmental management and the need to increase the level and effectiveness of wastewater treatment.

In 2001, there were 452 wastewater treatment plants in 200 out of 667 cities in the PRC, generating a total wastewater volume of 42.8 billion cubic meters. Industry accounted for 47% and domestic, commercial and institutional sources generated 53% of this. In 2001, 35% of municipal wastewater was treated before discharge.

The Government's 2010 goal is to provide wastewater treatment for at least 50% of all the cities. In the medium-sized cities (at prefectural or county level) at least 60% and in the major cities (at provincial level) more than 70% of wastewater will be treated. Significant investment is required to meet these targets.

"The guidelines will support the introduction of wastewater charges and will help to shift the burden of financing wastewater infrastructure from the Government to the users of the service," Mr. Murray said.

The study and the resulting guidelines provide support and direction to raising funds from users to finance operating, maintenance, and capital costs of wastewater treatment. A more transparent and predictable tariff policy and regulatory framework will promote private sector investment in the sector.

To achieve financial sustainability wastewater tariffs need to be set at a level to ensure the recovery of relevant costs, (operation and maintenance, debt service and capital costs), allow for effective billing and collection systems, and permit tariffs to be adjusted periodically as circumstances and costs change.

The most appropriate wastewater tariff structure for PRC is a volume-related usage charge based on metered water consumption. A move to charging industry on the basis of pollutant loadings is recommended as soon as metering and pollutant measurement and monitoring permit.

"The guidelines are an example of a practical implementation of two principles: the 'polluter pays' and 'service user pays' principles," Mr. Murray said.

"The guidelines also take into account affordability issues to ensure that wastewater tariffs are affordable to poor households."

He added that in accordance with the Management Methods on Public Hearings for Price Regulation issued by the National Development and Reform Commission, the guidelines require public consultation for applications to introduce or increase wastewater tariffs.

"Better public awareness of wastewater treatment and costs should improve customer willingness to pay for wastewater services," he said.

ADB has, through two other TAs from 1997 to 2001, supported the development and implementation of the guidelines. The national guidelines for water tariffs developed under the first study were promulgated as a decree by NDRC, and MOC in October 1998. A second study assisted the Government in implementing the Water Tariff Guidelines in three case study cities.

MOC has indicated interest in ADB providing further assistance to support the implementation of the guidelines. This may lead to a follow-up study to develop institutional and methodological capacity for implementing the national guidelines at municipal level.