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Price regulation is essential
(China Daily)
Updated: 2006-11-15 10:38 The price of water has kept rising in recent years, as has public doubt about what is behind the rises.
The new regulation on the supervision of water pricing, which was released by the National Development and Reform Commission (NDRC) to clarify what can be included in the cost of water supply and what should not, will help resolve public doubt. The cost of residential water use rose by 42 per cent from 2000 to 2005, according to a survey of 36 cities by the National Bureau of Statistics. Meanwhile, the bureau found that staff in monopoly sectors enjoy much higher incomes on average compared to competitive industries. Aware of the vast income gap, the public cannot help but feel angry about the continual increase in the cost of water. The price of water should be based on the costs of water supply. But what constitutes costs is complex. Water diversion, waste-water treatment and construction of pipes are, justifiably, water use costs. But office buildings, salary rises, staff benefits and hospitality expenses are also included in the costs of water, according to the current practice. It is not that those expenses cannot be taken into account; they can, but there must be a limit on them so that water suppliers do not push up their spending and claim it is reasonable. If this were the case, price hikes would be groundless, because those "swollen costs" are not truly necessary for water supply and should not be shouldered by the public. Proper pricing regulation, which makes the price of water match its real cost, is thus essential. (For more biz stories, please visit Industries)
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