XN000022-1996-05-30 — Page 7

5

Mr Choi Kan-pui (in Chinese): Mr President, Mr Governor, could you inform this Council, in relation to sewage charge in the Ordinance, now we have heard a lot of outcry and unhappiness in the trade and it is said that the pollutant database was incorrect and a lot of people did appeal and they were successful in their appeals. So that goes to show that when you worked out the pollutant level it was incorrect. So would the Government consider once again working out the level and the charges so that it will be fair and it will reflect the actual situation?

And then recently, the Administration has decided to increase the TES tremendously so that within three years it will be able to cover full costs. Why is it that you want to recover full costs within three years? Why can't it be extended to, let's say, 10 years? And if you increase by stages in 10 years, you will not have such a drastic increase.

Governor: On the first question, I don't think I can add very much to what I said earlier. We have undertaken, indeed we undertook some time ago, to review the TES. I hope that as a result of that review the number of people feeling obliged to appeal for variations of their TES rate will fall. The Secretary, I think, answered a question on this subject yesterday, giving all the latest figures, but clearly the more confidence there is in the basis for the Trade Effluent Surcharge, the fewer people, I guess, will in due course apply for a variation in the charge on them.

Secondly, the honourable gentleman asks about the period by which the Sewage Services Trading Fund should be covering its full costs. Let me say first of all that covering full costs is, in the case of the Sewage Services Trading Fund, a slight misnomer. We are not requiring the fund, as would be the case in other circumstances, to cope with depreciation, we are not requiring it to show a return on capital investment, and indeed the fund itself is not covering capital spending; that is being dealt with through the normal public sector programme and that makes it different from, I think, most other trading funds or from the principle of trading funds. In addition, the surplus made in the last year is being rolled over into this year in order to abate the charges that would otherwise be required. So we have limited the application of trading fund principles in order to try to reduce the overall costs.

We are proposing not a three year period to cover costs but a four year period. If there is pressure to extend the period beyond that, then obviously the consequence, it will be rather higher charges than might have been necessary later on and to some extent, later charge-payers subsidising earlier bills. But it may be that there are those who would think that was a fairer way of doing things. Clearly, judging by the enthusiasm with which these proposals have been greeted by the Council and others, we are going to find ourselves in quite a lengthy discussion about this. But I think all of us are looking for a sensible solution which enables us to clean up the environment without departing from the polluter-pays principle, or on the other hand without loading excessive charges on the customer.