The Saigon Water Corporation (SAWACO), which is tasked with managing and supplying tap water in the city, has proposed increasing prices year by year from now till 2019 but its suggested rates have been deemed expensive by lawmakers.
The water issue was discussed during a meeting on Tuesday by the budgetary and economic unit under the legislative People’s Council of Ho Chi Minh City.
This was the second time a proposal to hike water prices had been debated since January this year.
The state-run SAWACO has suggested raising tap water prices by 10.5 percent a year from 2015 to 2019.
As proposed, the prices will top VND9,612 a cubic meter this year and VND14,357 a cubic meter in 2019, or an over 50 percent rise after five years. Now, US$1 equals VND21,555.
Le Huu Quang, head of the customer affairs department of SAWACO, said that the proposed water price hike had been reported to the Department of Finance, the Department of Transport, and the Ho Chi Minh City Institute for Development Studies.
That surge will help SAWACO develop its infrastructure and expand the coverage of the provision of tap water in the city, Quang noted.
It is also expected to allow the firm to shrink the rate of water loss from its pipe system.
“It is estimated that a person averagely pays 0.7 percent of his income for tap water,” Quang elaborated. “The cost is lower than that for cable TV or telephone.”
The prices proposed by SAWACO are still cheaper than those in other major localities like Hanoi and Hai Phong in the north or Binh Duong in the south.
Tran Huu Tri, Party Secretary of District 12 and member of the People’s Council, rejected the comparison, saying the price should be inevitably cheaper than that in other places.
“The price of water involves the source of water,” he said.
“Ho Chi Minh City takes water from the Saigon River and the Dong Nai River, which are both good sources.
“So, it is certain to see water prices in the city cheaper than other areas,” he added.
To Thi Bich Chau, chief of cultural and social affairs of the People’s Council, called on SAWACO to seek consent from scientists since the Ho Chi Minh City Institute for Development Studies has considered the proposed increase logical but the Vietnam Union of Scientific and Technological Associations has disagreed with it.
Nguyen Thi Ngoc Hanh, a representative of Tan Phu District, said the prices of tap water in the city will go up 50 percent in 2019 against the current rate and “it is too expensive and will affect people’s life.”
Loss of water from pipe system
Many lawmakers also noted during the meeting that demanding a rise in tap water prices is not justified at a time when the rate of water loss due to leakage in the pipe system of SAWACO is still high.
It is not appropriate to include that loss in the price consumers have to pay, they said.
The current rate of leaked water is 32 percent and SAWACO has planned to pull it down to 25 percent in 2025.
With 1.7 million cubic meters pumped a day now, over 540,000 cubic meters of clean water is wasted on a daily basis because of such leakage, meaning nearly VND2.9 billion ($133,000) is lost a day.
Many deputies agreed that water prices charged on consumers will go down if that loss of water decreases.
However, Quang, from SAWACO, explained that it would require great investment to reduce the loss of water.
Averagely, it costs VND4,000 to reduce the loss of a cubic meter but SAWACO pays only VND3,600 to buy a cubic meter of clean water from pumping stations.
SAWACO is now working with partners from Japan and the Philippines to alleviate water loss.
To conclude the meeting, Nguyen Tan Tuyen, vice head of the budgetary and economic unit under the People’s Council, said he would note down all the feedback and submit it to higher authorities for consideration.