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Da Nang adjusts clean water prices after over decade, still lower than national average

By DA NANG Today / DA NANG Today
December 29, 2024, 12:57 [GMT+7]

Da Nang plans to increase clean water prices from early 2025 after over a decade of maintaining current rates. Despite the adjustment, the prices will remain below the national average, and subsidies will be provided for ethnic minorities and residents in remote and rural areas.

The Hoa Lien Water Supply Plant. Photo: HOANG HIEP
The Hoa Lien Water Supply Plant. Photo: HOANG HIEP

Over the past 10 years, water production costs have risen significantly

Over the past decade, Da Nang’s water supply infrastructure has expanded in line with the city’s development. In 2014, the city’s total water supply capacity was 210,000 cubic meters per day. This has now increased to 460,000 cubic metres per day, with the water network expanding by 1.5 times. Water quality has improved significantly, and investments in saltwater intrusion prevention have ensured a reliable freshwater supply from the An Trach dam.

The city also established the Hoa Lien Water Supply Plant, enhancing water supply capacity and ensuring long-term water security. However, water prices have remained unchanged since 2014 under Decision No. 06/2014/QD-UBND. Meanwhile, costs have risen significantly, including basic wages, regional minimum wages, electricity prices, and the costs of water treatment chemicals, materials, and maintenance.

Da Nang Water Supply JSC (Dawaco) has expanded its water supply using loan funds, leading to increased depreciation and interest expenses. Although Dawaco has proposed price adjustments several times, the city deferred increases to stabilize living conditions, especially during the COVID-19 pandemic. In 2024, a revised pricing plan was proposed and approved, ensuring prices reflect reasonable production costs while considering local economic and social conditions.

Considering and selecting appropriate clean water price while providing subsidies for various groups.

In 2024, Da Nang Water Supply JSC prepared and submitted a clean water pricing plan for review and assessment by relevant departments and authorities. Based on input from these entities, the Department of Finance advised the city’s People’s Committee on the proposed pricing adjustments.

The issue of adjusting clean water prices is thoroughly discussed and considered by city leaders. The proposed retail water pricing plan for Da Nang follows principles of accurately reflecting reasonable and lawful production costs, including those incurred during the extraction, production, distribution, and consumption processes.

The plan also ensures alignment with water quality standards, economic and technical benchmarks, supply-demand dynamics, and the city’s natural, economic, and social development conditions, as well as residents’ income levels.

Furthermore, it aims to balance the legitimate rights and interests of Da Nang Water Supply JSC and water users, encouraging water-saving practices and prompting water providers to improve service quality, reduce costs, and minimise water losses. A reasonable pricing structure is expected to attract investment into clean water production and distribution activities.

Under the new pricing plan, the city will provide subsidies for ethnic minorities, residents in remote communes, and rural areas. Ethnic minority households in Hoa Phu and Hoa Bac communes (Hoa Vang District) using up to 15 cubic metres per meter/month will be exempt from water charges. For usage exceeding 15 cubic metres per meter/month, the current rate of VND 2,000/m³ will remain unchanged.

Rural households, excluding Hoa Phu and Hoa Bac, and urban households will follow a tiered pricing system that increases with water usage, with an average price rise of around 13%.

Administrative offices, public service units, schools, hospitals, public facilities, production organisations, and businesses will see an increase of between 13.48% and 13.97%.

According to the Da Nang Statistics Office, the city’s average consumer price index (CPI) for the first 10 months of 2024 rose by 34.68% compared to 2014.

The adjustment in retail water prices is intended to offset operational costs and sustain water supply services for the city.

Overall, the price increase will have a limited impact on residents’ daily lives. For example, rural households using less than 10 cubic metres per meter/month will experience a maximum increase of only VND 4,000 per month. Urban households with average usage of 10–15 cubic metres per metre/month will see a monthly increase of VND 5,500-8,800.

Compared to the national average, Da Nang’s proposed water prices remain lower than those in many other localities.

Reported by NAM TRAN - Translated by TRUC VY

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