XN000022-1996-05-21 — Page 7

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As a further measure to ease the burden on the public, SSTF is not required to produce any return on the $20 billion capital investment being made by the Government in sewage infrastructure.

"Thus users will only be charged as much as is necessary to recoup the costs of operating the sewage services provided by the SSTF," said the spokesman.

He noted that every effort had been made by the Drainage Services Department to contain operating costs. Staffing levels have been critically examined. Automation and energy saving equipment have been put in place to optimise efficiency and where appropriate, certain activities including maintenance and disposal have been contracted out.

He also noted that the latest expenditure projections were generally in line with those contained in the brief given to the Legislative Council in November 1994.

"However, experience gained in the first year's operation of the Trading Fund shows that we are unable to achieve the revenue forecast in late 1994 due largely to the fact that the data base used in working out the charges was incomplete before the scheme was introduced.

"The reduction in the levels of pollutants discharged which has been brought about by the declaration of water control zones has also contributed to the reduction in revenue," he said.

Based on the updated information available, the plan for future increases necessary for the SSTF to break even, in terms of recouping its operating costs by 1999/2000 has been revised as follows:

From $1.38 to $1.86 per cubic metre with effect from April 1, 1997;

From $1.86 to $2.52 per cubic metre with effect from April 1, 1998; and

From $2.52 to $3.22 per cubic metre with effect from April 1, 1999.

The spokesman said: "These rates of increases are for indicative purposes only. They include allowance for inflation. The exact rates to be proposed each year will depend on a number of factors, including the actual performance of the SSTF, the budgets for each of the financial years concerned and the inflation rates. Once breakeven has been achieved, the levels of future increases will begin to reduce.