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MOC wants water price increase, MOF doesn’t
The Ministry of Construction (MOC) has sent a dispatch to the Ministry of Finance (MOF) proposing to raise the price of clean water for household consumption in 2009. However, the MOF’s Price and Market Research Institute does not back the idea.
Higher price, heavier burden on low income earners
MOC suggested the price increase for water following a proposal by the Vietnam Water Supply and Drainage Association. Under the proposal by the association, households will have to pay VND3,600/cu m for the first 16 cu m of consumption (the current price is VND2,800/cu m), VND4,200/cu m for the next 4 cu m (VND3,500/cu m), VND5,500/cu m for the next 10 cu m (VND5,000), and VND8,000/cu m for the 36th cu m and more (VND7,500).
As such, considering that every household (4 members) uses approximately 25 cu m of water a month, it would cost an additional VND22-25,000 a month. Therefore, households would have to pay nearly VND100,000 a month instead of the current VND73-75,000 a month.
Nguyen Ton, Chairman of the association, said that the price of water is very low and urban residents only have to pay 1% of their income for water, and therefore the price needs to be raised.
Ton went on to say that it is unreasonable to see the prices of other services skyrocketing, while the price of water remains unchanged.
However, the MOF does not think this way. In fact, the expense of water is extremely accountable and makes up a large sum of money in the budget of families who live in leased houses in urban areas. Most of them are low-income earners, and would now have to pay VND150,000 ($9.375) a month for water.
Dr Vu Dinh Anh, Deputy Head of the MOF’s Market and Price Institute, said that several tens of thousands VND would be a large sum of money for households in rural areas.
Vietnam strives to bring clean water to its citizens. However, the water price increase may force residents to refuse to use clean water. They may return to the use of unclean water from wells or rain water.
Clean water - the millennium goal
Dr. Anh said that the reason which the water association cited to propose the water price increase is not really convincing.
Providing clean water to people is one of the millennium goals the Government of Vietnam has committed to the world, and the story about the price of water is not simply a kind of business
“They cannot reason the investment capital shortage to attempt to increase water price. They can arrange capital from other sources, including bank loans and bond issuance, while they should not burden people,” Anh said.
VNN
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