Privatization Of Water Supply Services

The shortages of water resources have become the bottleneck for the sustainable development of the economy of China. At present, the domestic water supply services are generally provided by the public sector. Funds and technologies of local government are limited and investments are insufficient. All these hindered the water supply development, resulting in low production efficiency and bad services. As a result, the residents do not experience consistency in the quality and services of drinking water. In addition, the fee collection system is imperfect and the charge is lower than the cost, consequently, the public water supply enterprises suffer from serious losses and the water resources are unable to be saved. In such a way, there will be a potential detrimental effect on the country, the production department and the users.Nowadays, there is a global tendency for the public services, particularly the water supply services, to be owned and operated by private corporations rather than the government. The objective of this movement is primarily to optimize the public services. The Mainland China also follows this pace and is gradually opening its water supply industry and absorbing the private capital. However, the present situation in China poses a lot of obstacles to the privatization of its water supply. Owing to all these issues, the author is using the examples of Macao and Hong Kong to compare the differences between privatization and having public water supply. Simultaneously, the author also wants to illustrate that there is a necessity to privatize the urban water supply system.In a hypothetical approach to protect the sustainable use of water resources, the guarantee of economic efficiency of the water supply industry and the satisfaction of the social needs, the price system is suggested. The research is to put forward the proposals of preferential policies and through fund raising. Sources of funds can come from varied sources namely, tax revenues, loans, subsidies and other areas. All these measures can encourage more investors to invest the water supply service industry, which in turn, enhances privatization. In general, some basic formats are provided as guidelines for setting appropriate prices and management mechanism reform of the water supply industry, which is currently operated by the government department.