XN000022-1979-02-14 — Page 7

WEDNESDAY, FEBRUARY 14, 1979

5

REPRESENTATIONS ON REVISED WATER CHARGES

*******

OUT OF 85,000 TRADE CONSUMERS, ONLY ABOUT 200 USING MORE THAN 6.000 UNITS OF WATER IN A FOUR-MONTH BILLING PER 10D WILL LIKELY BENEFIT FROM THE CONCESSIONARY TARIFF ANNOUNCED BY THE FINANCIAL SECRETARY. THE HON. JAMES WU SAID AT THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

THIS DISCRIMINATION TO THE OVER 99 PER CENT OF TRADE CONSUMERS WAS POINTED OUT BY THE FEDERATION OF HONG KONG INDUSTRIES AND THE CHINESE MANUFACTURERS ASSOCIATION IN THE IR REPRESENTATIONS ON THE REVISED WATER CHARGES.

MR. WU HOPED THIS AND OTHER POINTS THEY RAISED WOULD BE ANSWERED BY THE FINANCIAL SECRETARY.

THE TWO BODIES HAD ALSO MADE THE POINT THAT MOST OF THOSE EXCLUDED FROM THE CONCESSION WERE SMALLER TO MEDIUM-SIZED FIRMS, SOME OF WHICH ARE ENGAGED IN A VITAL BUT NOT SO PROFITABLE INDUSTRY OF DYEING AND FINISHING.+

IT WAS SAID THAT THE COST OF DYEING AND FINISHING IN HONG KONG IS 30 TO 40 PER CENT HIGHER THAN NEIGHBOURING COMPETITORS AND WITH THE 37.5 PER CENT INCREASE IN WATER COSTS, THE MEAGRE 2.72 PER CENT GROSS PROF IT WILL BE FURTHER CUT DOWN TO BELOW 2 PER CENT, WHICH HARDLY ENCOURAGES THE DEVELOPMENT OF THIS +VITAL ARM OF OUR PREDOMINANT TEXTILE AND GARMENT INDUSTRY.+

+ INSTEAD, + MR. WU SAID, THERE HAS BEEN A NOTICEABLE DECREASE FROM 322 TO 303 FIRMS IN THIS SECTOR, WHILST WHAT WE WOULD LIKE TO SEE IS NEW INVESTMENT TO ESTABLISH EVEN HIGHER QUALITY DYEING AND FINISHING FACILITIES.+

HE SAID THE ELECTROPLATING INDUSTRY WHICH AGAIN VITALLY SUPPORTS ELECTRONICS AND WATCHES INDUSTRIES IS ANOTHER IMPORTANT USER OF WATER.

+ IN ALL, THESE THREE INDUSTRIES SHOULD ACCOUNT FOR SOME 65 PER CENT OF OUR TOTAL DOMESTIC EXPORTS ON WHICH WE RELY SO MUCH,+ HE SA ID.

THE OTHER POINTS RAISED BY THE FEDERATION AND THE ASSOCIATION CONCERNED THE NO-SUBSIDY PRINCIPLE ADVOCATED BY THE FINANCIAL SECRETARY.

MR. WU SAID IF THE PROPOSED RATES ARE TO BE ADOPTED, TRADE AND INDUSTRY, USING ONLY ABOUT 30 PER CENT OF TOTAL WATER CONSUMPTION, WOULD BE REQUIRED TO PAY 73 PER CENT OF THE TOTAL COST FOR WATER SUPPLY AS A WHOLE, IN EFFECT SUBSIDISING DOMESTIC USE.

AS TO THE REASONS GIVEN BY THE FINANCIAL SECRETARY TO SUPPORT THE PRINCIPLE, THESE ARE LESS THAN CONVINCING BECAUSE INDUSTRIALISTS ARE ALREADY MAKING ECONOMIC USE OF WATER IN THE IR PROCESSES AND CANNOT BE EXTRAVAGANT USERS BECAUSE OF THE VERY HIGH WATER RATES IN HONG KONG.

/ALSO, WITH

Page &