Money Down The Drain

Hong Kong’s water strategy is simple: it doesn’t really have one. Two scholars are investigating the causes and consequences as part of a multi-city project on water use and policy in global cities.

You need to know only one thing about water in Hong Kong: the price paid by households and businesses has remained unchanged for 20 years despite increases in costs and people’s incomes. To public policy experts, economists and environmentalists alike, that is a major reason behind the city’s wasteful use of water. After all, what incentive is there to conserve water or use it more efficiently?


Publicity materials of Dr Frederick Lee’s Water Governance Research Programme.

Dr Frederick Lee, who heads the Faculty of Social Sciences’ Water Governance Research Programme, has been examining the problem with economist Professor James Nickum as part of an ongoing study on water use in major cities around the world.


“Hong Kong is one of the only cities where consumption per capita is going up. In London, New York, Chicago – it’s going down. The same is true for Taipei, Beijing, Shenzhen, Singapore. The reason is because it’s so cheap here,” he said.


Hong Kong people consume an average 220 litres per person per day, against 150 litres in Singapore and a world average of 170 litres. Given the city’s famous water shortages of the 1960s and 1970s, when people were restricted to as little as four hours of water every four days, one would think water would be a matter of concern, at least within the Government. But several factors have pushed it down the priority list and led to complacency.

Hong Kong has become increasingly locked into this dependency on imported water and we’re now in a very weak bargaining position in terms of how much water we should get and how much we should pay for it.

Dr Frederick Lee

Sustainability dilemma


One is the city’s financial success which makes it easier to cover costs, another the migration of industry into Mainland China. Industry uses a lot of water. As Dr Lee and Professor Nickum have discovered in their ongoing study, nearly all major cities have seen total water use fall over the past two or three decades for this same reason. But it has an impact on revenue.


“Because a lot of the costs of water facilities and supplies are fixed, the more you ask people to save water, the higher the price they have to pay per unit. So ironically as demand goes down, the price goes up.


“Hong Kong has solved this sustainability dilemma by having a huge budget surplus that can easily cover the costs,” Professor Nickum noted.


However, that will not last forever. In the meantime, the costs of water provision keep rising.


Hong Kong’s main water expense is the price it pays to Guangdong for a guaranteed 820 million cubic metres of water from the Dongjiang River per year, whether or not it is used. The city approached that limit only once in the past 10 years, but is not allowed under the agreement to sell the unused water. The payments for this water have increased from 34.5 per cent of the overall water budget in 1993–1994 to 44.4 per cent in 2013–2014.


“Hong Kong has become increasingly locked into this dependency on imported water and we’re now in a very weak bargaining position in terms of how much water we should get and how much we should pay for it,” Dr Lee said.

From left: Dr Frederick Lee, Professor James Nickum and Professor John Burns, Dean of the Faculty of Social Sciences.

House of cards


An alternative would be to set targets for conserving water, which could be achieved relatively easily by such things as mandating low-flow showerheads and the like. Hong Kong, Guangdong and Macau should also consider jointly strategising water resources planning – something Dr Lee’s programme is promoting.


“We need to look at the entire Pearl River Delta Region as one water planning unit and see what is the best way to utilise its resources. But there are a lot of political and institutional barriers to overcome,” he said.


The Government itself has talked about desalination but this is expensive and only deals with supply not demand, Professor Nickum said. “There are no incentives anywhere in the system to save on water, even though it’s all based on an artificial house of cards,” he said – a house that could come tumbling down if a severe financial crisis hits government revenues, or saline water invades fresh water territory due to climate change, or demand for water continues growing in Pearl River Delta cities in competition with Hong Kong’s needs, or there are political disagreements between Hong Kong and Guangdong.


In the meantime, wastefulness prevails. Hong Kong may not be as profligate as another city the men are studying, Dubai, where desalinated water is provided free and people consume an astonishing 500 litres per person per day. But the principle is the same: we don’t protect what we don’t value, in this case water.

Professor Nickum and Dr Frederick Lee (centre), with postgraduate research students from HKU, Chinese University of Hong Kong, and Sun Yat-sen University at a workshop held at HKU.