PUBLIC UTILITIES BOARD (Increase in water rates)

Mr Ho See Beng asked the Minister for Trade and Industry, with reference to his recent speech regarding increase in water consumption and the possible increase in water rates, whether there is no way of reducing water consumption without raising water charges, and whether he is aware that, as the Public Utilities Board has not ruled out the possibility of further increases in electricity and gas charges, with yearly increases in water rates many families with limited incomes will find great difficulty in making ends meet.

The Minister for Trade and Industry (Dr Tony Tan Keng Yam): Sir, water rates have to be periodically revised because the cost of supplying water rises each year. As long as the PUB workers continue to enjoy periodic wage increases in line with other workers and new reservoirs and water treatment plants have to be constructed at higher cost, there is no way to avoid revision of water tariffs.

In considering the revision of water tariffs, PUB has also to take into account the need to curb the high rate of increase in water consumption which, if not brought down, will lead to water shortages in the future. Past experience has shown that increases in water tariffs are effective in helping to curb wasteful consumption. A more drastic measure to cut wasteful water consumption is to impose water rationing. Such a measure, in my view, is socially less palat- able and economically less efficient. It should be introduced, if at all, in a crisis. To help the public to be more frugal in water usage, the PUB will mount a Save Water Campaign in October this year. I am aware that the PUB has not ruled out the possibility of further increases in electricity and gas charges. PUB cannot hold down charges when the price of imported oil continues to rise.

I share the hon. Member for Khe Bong's concern for the difficulties facing families with limited incomes, and I would like to assure him that the revision in water tariffs will be structured so that the increase will be equitable. It will be the large and wasteful consumers who will be more heavily penalized for the wasteful habits. I have also asked the PUB to phase out the increases so as to allow consumers time to adjust their expenditure and to spare them from the traumatic adjustments of sudden large revisions.

For this round of revision, the increases will be quite moderate. For those households which consume less than 20 cubic metres of water per month - 61% of households are in this category - the average increase will amount to less than a dollar per month; in fact, less than the price of a packet of cigarettes or three cups of coffee.

Mr Ho See Beng: Mr Deputy Speaker, Sir, the Minister for Trade and Industry seems to believe that water consumption can only be reduced if the rate of water charges is increased. I wish to refer him to a speech he made recently. In his speech, he did say that the rate of water consumption dropped from 9% to 1.7% in 1976 after the last revision in 1975 but the rate of increase in water consumption had since been steadily rising to 7.7% last year. If this is so, it proves beyond a doubt that increasing the water rates is not an effective measure to stop an increase in water consumption. Thus, I would like to ask the Minister whether he will consider launching a social campaign to try and persuade the people to save water voluntarily.

Dr Tony Tan Keng Yam: Mr Deputy Speaker, Sir, as I said just now, the PUB will be mounting a Save Water Campaign in October to persuade the public to be more frugal in water usage. However, we will also increase the water tariffs to make sure that water usage goes down.

Mr Ho See Beng: Sir, I think that is not fair. The Minister should wait for at least one year to see whether -

Mr Deputy Speaker: Mr Ho, are you raising a supplementary question?

Mr Ho See Beng: Yes, Sir, I am raising a supplementary question following this point. I would like to ask the Minister to consider increasing the water rates only as a last resort.

Dr Tony Tan Keng Yam: Mr Deputy Speaker, Sir, we have considered other means and we believe that the increase in water tariffs is one of the best ways to bring down water usage.