|
To Conserve Water, Chi•
<br /> na Lifts Its Price
<br /> By PETER WONACOTT ket can bear. Some have started, and ries use five to 10 times more water than
<br /> cities including Beijing, which is espe- factories in developed nations like the U.S.
<br /> BEIJING—In the past 50 years,China daily short of water, plan marked in- to produce an equal amount of goods.
<br /> has gone from an aspiring Communist creases. Within two years, Beijing plans Spotting an opportunity, foreign corn-
<br /> utopia to the land of a billion different to lift the price of water to 54 cents a ton, panies have dived into China's water
<br /> business plans. But one constant has re- or nearly double the price it is now. market, with mixed results. Among the
<br /> mained through the country's economic Changing the capital's habits is seen as most aggressive is Veolia Water, the wa-
<br /> transformation: cheap water. crucial if Beijing is going to have enough ter-management division of Veolia Envi-
<br /> Now, facing acute shortages and a water when it hosts the 2008 Olympics. ronnement SA, which has invested about
<br /> true threat to future growth,the Chinese "We have two choices," says Mr. Wu, $480 million in 11 water projects in China.
<br /> government this year is ordering local the water official. "Raise prices and gen- "We don't see any hurdles to expanding
<br /> water bureaus across the country to lift grate income,or not raise them and con- in China," says Stephan Truchot,project
<br /> the price of water for the first time since tinue to suffer from shortages." finance director, Veolia Water Asia, a
<br /> the People's Republic of China was estab- Indeed,China is choking in a lot more unit of the French water giant.
<br /> lished in 1949. Officials believe it is a places than Beijing. About two-thirds of Likewise, ITT Industries Inc. of
<br /> matter of national security. China's cities are short of water, accord- White Plains, N.Y., sees the market tide
<br /> "China's water situation and eco- ing to the Ministry of Water Resources. going its way. The company is supplying
<br /> nomic security are very tightly linked," In the cities, 90% of China's rivers also pumping equipment to projects ranging
<br /> says Wu Jisong, a senior official at Chi- are seriously polluted; in the country- from the massive Three Gorges Dam to
<br /> na's Ministry of Water Resources. side, 360 million residents aren't able to the relatively minuscule municipal water
<br /> Among the many environmental drink water that meets normal sanitation projects. As a result, ITT sees China as
<br /> strains created by China's economic standards, and water tables in the arid its fastest-growing market,with sales up
<br /> growth, water problems are perhaps felt north are dropping. 55%last year from a year earlier, with a
<br /> most acutely and widely. From memory- China's experiments with savingwater similar pace expected this year. By 2006,
<br /> chip plants in Shanghai to grain growers go beyond lifting prices.The country is ex- ITT expects to be earning$500 million a
<br /> in the nation's north, shortages are hin- panding water-rationing programs after year in China, according to Mark Steele,
<br /> dering production. Pollution poses health test-piloting them in a handful of cities. ITT's country chief.
<br /> threats to wealthy urbanites and poor In the Southwest city of Mianyang, in "The price rise is going to encourage
<br /> farmers alike. China's challenge is tied Sichuan province,all water users receive more infrastructure investment,"he says.
<br /> up in raising prices steadily enough to a quota, and those that exceed it on a At the same time, other foreign corn-
<br /> encourage people to conserve water and quarterly basis are charged higher panies'experience points out the hazards
<br /> to entice foreign companies to help over- prices. Some academics also are urging of an evolving market and the difficulty
<br /> haul creaky facilities, but not so steeply the government to allow farmers to sell of profiting from government-run
<br /> as to fuel inflation and turn people the water they don't use, a trading sys- projects. Britain's RWE Thames Water,
<br /> against the government. tem that has apparently popped up in the world's third-largest water provider,
<br /> A long era of heavy subsidies has al- scattered Chinese villages to alleviate earlier this month said it was pulling out
<br /> lowed industry and ordinary citizens to the burden of high water prices. of a money-losing water treatment plant
<br /> waste water with few economic repercus- The waste is staggering, and costly. in Shanghai.The retreat followed the gov-
<br /> sions. But under the government's new About 20%of China's urban water supply ernment's decision to end a policy that
<br /> plan, local water bureaus this year will isl ostthrough leakypipes,thewaterminis- guaranteed a 15%fixed rate of return on
<br /> raise prices to what they deem the mar- try says.It figures that the nation's facto- such projects.
<br /> 4 -1s-°11Jd/ A Ja.ve d
<br />
|