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Wednesday, February 24, 1971

POLICY ON WATER CHARGES

Financial Secretary Reviews Situation

Sir John Cowperthwaite, Financial Secretary, told the Legislative

Council today that the present price of water had to be substantially raised

if the Government was to continue its present practice of pricing water so

as to recover costs.

"I must say that we must continue our present practice because the

supply of water cannot be regarded as a social service," he said when presenting

his Budget proposals.

Giving the background to his decision to raise the cost of fresh

water from July 1, and salt water for flushing to bulk consumers from April 1,

and others from July 1, he said it was "characteristic of water that each

new source tends to be more expensive than the last, both because the available

sites are less economical and because the cost of capital has been rising."

He continued: "Our present internal supply system produces water

at a cost of $1.45 per thousand gallons treated and delivered to service

reservoirs; Chinese water costs $2 at the same point. High Island will

oost a little over $2, while desalted water from the proposed single-purpose

plant will cost between $4 and $5.

"To these costs must be added distribution and other operating costs

and the loss in the distribution system, which together add about $1.50.

Furthermore, these unit costs relate to the optimum situation where the capacity

of the system is being fully utilised."

Me estimated

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