Local governments in China should charge reasonable fees for sewage treatment and waste water, a senior environmental official has said.

Low or non-existent charges in many cities have been a hurdle for water pollution control in China.

The fact is largely attributed to a generally held belief that sewage treatment should be paid by government, environment officials say.

Speaking in Beijing on Tuesday, Vice-Minister of the State Environmental Protection Administration (SEPA) Pan Yue said all cities should start charging for sewage treatment as soon as possible.

In cities where sewage treatment already comes at a cost, prices should be adjusted so that treatment plants can cover their costs and earn a certain profit.

In cities where profitability is impossible, local governments should at least set a minimum price for sewage treatment so that the normal operations can be maintained, Pan said.

The administration's call is part of a series of measures to reinforce sewage treatment in the country while pushing the sewage treatment business towards industrialization and a market-based model.

By the end of last year, a total of 516 sewage treatment plants had been built and put into operation, statistics from the administration show.

The plants can handle more than 32 million tons of sewage each day.

However, Pan said the capacity is still too low for China, where expansion is leading to a 5 percent growth in sewage discharge every year.

Last year, 46 billion tons of sewage were discharged.

Currently, more than two thirds of the sewage treatment enterprises in the country are not operated as businesses.

The measures will make governments responsible for supervision of sewage treatment plants and other services, while raising their efficiency.

At the same time, central and local governments will increase investment in sewage treatment facilities.

Models such as BOT (build-operate-transfer) and investment from the private sector are encouraged.

According to the goals set for the 10th Five-Year Plan (2001-2005), by 2005, 45 percent of the sewage in cities should be collectively treated. The rate in cities with a population of more than 500,000 was set at 60 percent.

But now 61.5 percent of the country's cities do not have sewage treatment plants.

At the same time, drainage networks in cities are not sound. A certain amount of sewage is directly let out into rivers.

According to Pan, private investment on sewage treatment should receive favorable policies in taxation, land, electricity and credit guarantee.

To guarantee investor's profits, the government will soon enforce the emission fee levying system throughout the country, which was required by a 2003 regulation but has not been established in most areas.

Pan said it is also important for the government to regulate and oversee the quasi-public service in order to avoid risks possibly brought by profit-oriented investors.

According to him, SEPA is going to make standards on construction, operation and technology for industrial players.

Besides, contractors can only be chosen through public bidding, he said.

Currently, private capital is more frequently seen in public service sectors such as sewage treatment and bus operation, as the Chinese Government gradually opens the long-state-monopolized businesses to private funds to improve their efficiency.

Beijing resident Li Lin said he feels there is better public service now. "They are more efficient and care more for our needs," he said.

(China Daily July 8, 2004)