Habe sehr schnell eine Rückantwort bekommen.
Dear Lin Jun Shao,
Thank you for your email.
There is no such so called dispute regarding water tariff, however, if you’re talking about the Central Government State Council’s No. 129 document (http://www.gov.cn/zhengce/content/2021-01/06/content_5577440.htm), it is not a dispute, but to cleaning up the irregular and unreasonable charges in the market and further optimizing the business environment will help attract social and foreign capital to enter the business, which is good for our company's business development. The specific points are as follows:
1) What is to be banned is the irregular and unreasonable fees in the water supply business, such as Installation fee, capacity increase fee, switch gate fee, and completion verification fee etc., and we do not have these fees in the business of the Group. I believe that after the government completes the clean-up action, it will be a more equal business environment, a level play field for the utility sector, which will be more beneficial to companies like us, that rely on high-quality services and regulate and transparent fees.
2) The connection income of the group is referring to the project cost within the red dotted line of the building in this document. In terms of the business model, the water supply company charging by the meters per household, and provides services to the households that are clearly encouraged and required by the policy. Therefore, the connection business is basically unaffected in terms of revenue, profit or cash flow.
3) The principle of document formulation is "who benefits, who pays", that is, the principle of "user pays". In the formulation of water prices, it is required to be based on "costs plus reasonable profits" to effectively play the role of tariff mechanism , which is to promote water conservation. Therefore, from a long-term perspective, the deepening of the market-oriented reform of water affairs will provide more visible and predictability to our company’s investment returns.
If you have any further question, please do not hesitate to contact me.
Dr. Nick Huang
China Water Affairs Group Ltd
Tel: +852 39686619