Price Regulation For Urban Sewage Treatment Industry

Water is essential factor of material resource and environment for human life and material production. With the continuous improvement of the urbanization level, water shortages and water pollution had become a constraint factor for economic development and affect people's standard of living. Sewage treatment is the most effective way to solve water pollution and protecting water environment. Single investment and institutions model of government had no longer met the market economic reform and urbanization of sewage treatment in China. The Chinese government made it clear that sewage treatment had become the diversification investment, the subject of enterprise operation, market-oriented of operation and management, come into being an open, competitive running pattern. However, sewage treatment can not simply rely on market mechanisms to regulate the price level of sewage services because that was a regional natural monopolies industry with positive externalities, large-scale investment, product characteristics that the customer has no direct demands, namely market failure. Therefore, pricing regulation has become a key issue and focus in the process of wastewater treatment market.The pricing problems of wastewater treatment were detailed analyzed on the basis of public pricing theories and foreign experience by field survey and questionnaire method, quantitative analysis and comparative analysis. The current sewage treatment methods are analyzed and compared; the pricing level integrated model of sewage treatment had been set up on based of yardstick competition and DEA technology that was used to calculate the price of sewage treatment in northern Henan. Finally, the pricing policy suggests was put forward about sewage treatment.The eight chapters were divided into four parts. The first part includes chapters I and II, chapters I describes the background, purpose, the theoretical and practical significance, foreign summarized and reviewed to identify ideas, methods and the possibility of innovation. The second chapter was the basic pricing theory including the subject, methods, objectives and principles. The economic and technical characteristics of sewage treatment industry with a regional monopoly, positive externalities, large-scale investment and longer payback period were analyzed. The price regulation of sewage treatment industry was required from the government, enterprises and consumers.The second part includes chapters III and IV. In the third chapter the pricing problems of sewage treatment were discussed. The foreign(including U.S., Germany, France, Britain, Canada, Singapore, Japan, Australia, etc.) pricing practices and experience of the sewage treatment was reviewed in the fourth chapter, and the organization and the level and structure of price was evaluated, China Government should learn from the foreign experience.The third part includes the fifth, sixth, seventh chapter, the factors of the impact price level of sewage treatment was analyzed in Chapter V including pricing principles, the cost, industry policy, the supply and demand. The crucial factors were pointed out. The dvantages and disadvantages of existing pricing methods were pointed out by classified and compared, the pricing models was set up on the based of DEA (Data Envelopment Analysis, abbreviation. DEA) technology and comparison including the principles ideas what were detail in Chapter VI. The price policy of sewage treatment was analyzed in Henan , the prices of the sewage treatment plants were calculated in northern Henan, the model were tested in Chapter VII. The fourth part includes the eighth chapter and conclusions. A complete set of pricing policy recommendations of sewage treatment were pointed out in Chapter VIII. The main conclusions of the paper were summarized including the issues what were researched in the further.The innovation of the paper: (1) the pricing model of wastewater treatment was built on based of yardstick competition and DEA. The relative efficiency of operating costs and investment costs of sewage treatment plants were estimated by DEA, the relative efficiency numbers were applied in calculating each target cost on based of the actual cost of sewage treatment plants as a pricing basis. And the target costs can improve efficiency. The model was considered that the cost of sewage treatment plants were control requirements, but also the factors of the internal rate of return, the size differences between plants, sewage treatment level, and external environment were take into account fully. (2) The operating cost efficiency model of sewage treatment plants were built by New-Cost-DEA. The appropriate input and output indexes were selected to calculating of the sewage treatment operating costs relative efficiency, and calculating the operating target costs and standard cost, the cost is comparable. (3) The investment cost efficiency model was built by Super-SBM, the appropriate input and output indexes were selected, the relative investment cost efficiency were measured to calculating the investment target cost and standard investment cost of sewage treatment plants. (4) The price regulation problems of sewage treatment were pointed out in China. The advantages and disadvantages of each method was pointed by comparative analysis, the relevant policy recommendations of pricing regulation were pointed outConclusion: (1) The pricing level of sewage treatment was slower than the cost of sewage treatment, pricing methods were not standardized, price policy was imperfect, the implementation of policies was not in place, price information disclosure system and feedback mechanisms were inadequate (2) The Chinese government should accelerate the functional transformation from, and improve macro-control policies of sewage treatment; guided by the principles of scientific and reasonable price of sewage services; establish an effective mechanism of cost constraints; improve the legislation regulating pricing behavior, using effective monitoring techniques and tools to improve the control level of price sewage treatment . (3) The market mechanisms should be used in sewage treatment industry for protecting water environment, the price level of sewage treatment should be determined by cost competition mechanism compared e and performance evaluation, low-income groups should get subsidies.The market of sewage treatment is still development initial stage, but the sewage treatment industry should have a more healthy direction with market-oriented continuous improvement of sewage treatment and the government pricing regulations policies in China.