Price Supervision is the core content of economic supervision in the overall market supervision system in water sector. In 1998, National Metrology Commission of China and Ministry of Construction P.R.China co-released the document: ‘Pricing Supervision over Urban Water Supply’. This document ordained the principle of urban water supply tariff, which builds up by four factors: cost, expense, tax and a profit of 8-10%. Since 1998, the increase rate of national urban water tariff had increased to 363% with an average annual increase of 16.5%. But even this didn’t achieve the expected profit of 8-10%, the increasing of water tariff is mainly because of the increased cost of waste water treatment and water resource. Correspondingly, tap water tariff had an annual increasing rate at 7%. This aroused the public’s drastic dissatisfaction.
And according to the statistic data, the water tariff still can not counteract to the cost, here mainly are two reasons: the uncontrollable cost and the lower water tariff. Recently the National Development and Reform Commission were seeking advice for ‘Supervision and Examination of Urban Water Supply Pricing (for Trial Implementation)’ from public, it aims to find out a scientific methodology to the water tariff supervision.
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