Citizens pay to keep China's cities clean A wastewater tax is also being planned, writes Barun Roy In the latest of its reformist moves to make municipal services viable, China has turned to an area that will raise eyebrows in many developing countries, certainly ours. Authorities in a number of Chinese cities have begun charging residents a fee for collecting their daily garbage. After eight cities, Nanjing, Kunming, Zhuhai, Wuhan, Chengdu, Beihai, Guilin, and Suzhou, had shown that the garbage fee was not only feasible but also desirable, Beijing introduced it last September and Guangzhou and Shanghai are considering doing so. Civic authorities believe this will help them garner enough resources to offer a better collection and disposal service.
Until now, at least 35 per cent of Beijing's daily accumulation of garbage remained uncollected because municipal finances were not adequate. Officials say the charges are not punitive, nor are they based on the volume of garbage each household generates. Volume charging may follow when the authorities are better equipped, but the purpose now is to get people accept the idea that municipal services don't come cheap and government budgets aren't enough to pay for them. Obviously, the tariff is also a bait for private firms to get involved in rubbish disposal. Chengdu provides an example that joint ventures with private firms, with the private party holding the majority share, can be a good way to improve the quality of services.
Equally interesting is China's intention to impose wastewater tariffs on all water consumers in cities and make such charges a specific line item in monthly water bills. The government is specially targeting 52 major cities in its effort to improve the urban environment. Some 27 billion cubic metres of untreated industrial wastewater are discharged in the country every year, constituting the worst single source of water pollution in large urban areas. Less than 30 per cent of this effluent is treated, and, of the treated wastewater, only 22 per cent meets national discharge standards.
The problem of domestic wastewater is no less acute. An estimated 20 billion cubic metres of municipal wastewater are discharged annually by China's more than 400 million urban residents, and 90 per cent of the effluent is untreated. The government decision is encouraged by an experiment in Fuzhou City in Fujian Province, where the authorities are charging wastewater fees from residents to pay for a project to expand water supply and wastewater treatment facilities. The charges, introduced in June 1998, are still modest: Yuan 0.1 for domestic users, Yuan 0.15 for industrial users, and Yuan 0.25 for hotels and commercial users per cubic metre. These are based on 90 per cent of billed water consumption. But the Fuzhou municipal government has agreed that charges will need to be tripled by 2003 to meet the project's cost recovery and financial ratio requirements.
All water users pay the tariff, even industries that are not directly connected to the sewerage system. Although industries are obliged to have their own treatment facilities on site, they must pay if their discharges exceed permissible strengths. This, in effect, means industries are subsidising residential consumers. The authorities believe the tariffs will eventually help meet the operation and maintenance of the city's wastewater treatment plants and repay the ADB loan. Wastewater tariffs are a logical consequence of water fees that the authorities charge urban residents. Water is no longer a free commodity in China's cities.
It is the government's policy that all new water supply projects must be able to recover their full costs by the year 2007, after which subsidies are supposed to stop. The government takes note of the fact that urban incomes in the country have been rising while inflation has been brought under control. There were major water tariff increases, averaging 17 per cent to 21 per cent, between 1986 and 1996 across the nation, but these were not enough to wipe out the losses that many of China's 551 water supply companies continue to suffer. A new study is now under way for further increases within a well defined structure that will have demand management as its principal objective.