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Overview

Background

Since the early 1990s, the Government of the Peoples Republic of China (PRC) has implemented key environmental policies in order to progressively improve wastewater management and reduce environmental pollution. This has resulted in dramatic sector improvements, notably through the construction of wastewater treatment infrastructure. Currently, there are approximately 400 wastewater treatment plants in the PRC, and over 250 are currently being commissioned. As a consequence, wastewater sector investments have risen five fold over the past decade, and are set to continue in the medium term at the current capital investment level of over Yuan 15 billion per year. Due to the scale of investment, the Government has recognized the need to strengthen financial management systems, and in parallel with water sector reforms, to progressively transfer primary sources of funding from central and municipal government sources to localized, user-pay tariff modalities.

Objectives and Scope

The primary objective of the advisory technical assistance project (TA) was to assist the Government to improve urban wastewater management and enable investment in wastewater infrastructure by developing national guidelines for wastewater tariffs. Objectives also included the development of tariff calculation methodologies emphasizing affordability, encouraging multi-channel investment such as private sector participation, and providing a comprehensive package of institutional and financial reform recommendations.

The scope of the TA included (i) an assessment of wastewater management issues and existing practices internationally and within the PRC with a specific focus on wastewater tariff systems; (ii) development of national urban wastewater tariff guidelines (NGWWT), including tariff calculation methods; (iii) assessment of four case study cities (CSCs); (iv) institutional, financial and management reviews; and (v) an assessment of constraints and opportunities for multi-channel investment and provision of recommendations to encourage such investment.

Outputs

The TA outputs include a three-volume Final Report which can be accessed directly on this website. As shown, in addition to the Main Report (Volume I), a major output of the Final Report is a detailed draft NGWWT (Volume II), which comprises a concise main text of 37 clauses, and five annexes covering; (i) Rationale; (ii) Tariff Calculation Methodology; (iii) Joint Water Supply and Wastewater Billing; (iv) Enforcement and Penalties; and (v) Model Agreement for Industrial Discharges. Additional guidance documents are also included (Volume III), including guidance for private sector participation, economic analysis and tariff objectives and the results the CSC analysis. The draft NGWWT and associated wastewater tariff policies, objectives and structures were prepared in close consultation with the Ministry of Construction (MOC), other concerned ministries, and the CSCs.

Proposed Action

The MOC are currently in the process of submitting the draft NGWWT to the PRC State Council for approval, following which all levels of government will be required to implement the NGWWT. It is also envisioned that the associated institutional, financial and other recommendations from the TA will be implemented to support effective tariff reform and improve sector sustainability.