Hong Kong’s first water rate rise in 3 decades to be ‘definitely’ passed on to consumers, industry leaders say
An increase in Hong Kong water charges will “definitely” be passed on to consumers given the poor economic outlook, industry representatives have warned after the government announced plans to raise the tariffs for the first time in three decades.
Eric Chau Hon-keung of the Laundry Association of Hong Kong said on Monday that the increase in water tariffs would hugely affect his industry, in which water bills made up a large proportion of costs.
Chau told a radio show that water bills could cost laundry service operators in the hospitality and catering industry up to HK$200,000 (US$25,570) a month, saying there was no way to reduce their reliance on the utility.
“It is understandable that the price will increase after so many years, but we told authorities this is not a good time as many industries are facing difficulties,” he said.
“If they really have to increase the prices, we hope they will go easy, for example, an increase of below 10 per cent.”
The Water Supplies Department said on Sunday that the rise was due to the increasing budget deficit and pledged to consider residents’ affordability and the economy before making any moves.
Water charges – priced at up to HK$9.05 per cubic metre – have been frozen since 1995.
The department said that over the past three decades, the number of users had significantly increased from 2.2 million to the current 3.2 million, requiring water facilities to be expanded to meet demand and resulting in rising costs.
Chau said a 5 per cent rise would be ideal for his industry.
“We are a sunset industry, if the costs increase, we will be hit immediately. So we will definitely need to transfer the costs to consumers,” he said.
Simon Wong Ka-wo, honorary president of Institute Of Dining Professionals, said the catering industry would be hit less hard, but voiced concerns about a chain reaction.
Wong told the same show that the monthly water bill for Hong Kong-style cafes, or cha chaan teng, was about HK$1,000, saying it could go up to HK$10,000 for bigger restaurants.
“Given that Hong Kong’s economy has not fully recovered, especially since the catering industry has been suffering in the past year and facing operational difficulties, even a small increase in costs would greatly worsen our situation,” he said.
He added that he was concerned that authorities raising water prices would trigger an increase in other utilities and lead to higher inflation rates.
“With many Hongkongers travelling to mainland China, restaurants dare not transfer the cost to consumers for fear this would make spending in other mainland cities more value-for-money,” he said.
Department director Roger Wong Yan-lok told local media that adjusting water tariffs was necessary but should be done in “humane and gentle manner”.
He noted that local water bills currently accounted for about 0.1 to 0.2 per cent of household expenditure, which was much lower than the 1 to 2 per cent in other advanced cities.
In January, finance minister Paul Chan Mo-po said he would review some public service charges that had not been adjusted for a long time and those based on a user-pays principle, the costs of which the government could not recoup, in a bid to boost revenue and balance the books.
Public service charges accounted for less than 4 per cent, or HK$21 billion, of total revenue, estimated to be HK$543 billion, according to the 2023-24 budget.
