Rise in water price should be justified

The public needs detailed information for any increase in water prices, says an article on Red Net. Excerpt:

The past decade has seen famous international water treatment and supply companies enter China. Many of these firms now want to raise water prices, prompting some experts to say their efforts are aimed at protecting the interests of foreign capital.

Foreign companies deserve a reasonable return on their investment. But since water for domestic use is an essential public product, the government rather than the suppliers should fix the price.

With low technology and management costs, foreign companies do make a profit. Now they want to raise prices to make even more profits.

Some experts, however, say water prices should be raised, and give reasons for that. First they believe it will guarantee social justice by transferring money from the rich to the poor. Second, they think it would help save water. Third, they say it can make up for the losses of water companies.

Their logic seems to be misplaced. One, it is unreasonable to overcharge the rich for water. Two, the poor will get nothing from the rise in prices except heavier economic burdens. Three, since the demand for water is rigid it cannot be adjusted through price leverage. And four, it is unfair to make the public pay to turn water companies losses into profits without telling it why it has to do so.

When it comes to raising water prices, the determining factor should be justified reasons.

(China Daily 07/29/2009 page9)