Ministry of Construction

August 22, 2006

I. Major Achievements and Existing Problems of China's Urban Water Sector during the Period of the 10th Five-Year Plan

In the 10th Five-Year Plan Period, Construction Administrations of various levels have, under the principles set by the Central Party Committee and the State Council, stepped up the efforts in preventing and controlling urban water pollution so as to ensure urban water safety. The building of water-efficient cities has been greatly promoted and remarkable achievements have been scored in the development of the urban water sector, which is manifested in the following aspects:

1. The guarantee of water supply security has been intensified and more services have been offered.

In recent years, the Ministry of Construction has strengthened the establishment of the supervision system on urban piped water quality. A series of standards and regulations have been promulgated, including Quality Standards for Urban Piped Water. Emergency Plan for Major Accidents in Urban Water Supply System has been formulated, which provides relevant technologies in coping with water source pollution and has successfully solved water supply crises caused by pollution of SonghuajiangRiver and BeijiangRiver in GuangdongProvince and secured the safety of drinking water.

In 2005, the total number of urban water users amounted to about 327 million, up by 78.7325 million over that in 2000. Urban water coverage rate reached 91.1 percent, increased by 27 percentage points over the past five years. In the meantime, efforts have been made to strengthen the renovation of urban water supply pipe networks and accelerate urban-rural integrated water supply.

2.Urban wastewater treatment has been speeded up.

By the end of 2005, of 661 cities in china, 792 waste water treatment plants has been built in 383 cities, and wastewater treatment rate has climbed to 52 percent from 34 percent in 2000, with 7 percentage points above the goal set by the 10th Five-Year Plan. Wastewater treatment technical route and management mechanism that suits to Chinese situations has taken shape. Urban wastewater treatment rate in 135 cities has reached or approximated 70 percent.

3.Urban water efficiency has been improved.

In the 10th Five -Year Plan Period, every year, the average saved water reached over 3.5 billion cubic meters. In 2005, the volume of saved water amounted to 3.8 billion cubic meters, the recycling rate of industrial water in Chinese cities soared to 83.6 percent, and the average per capita daily water consumption decreased from 220.21 liter in 2000 to 204.1 liter, showing the tendency of steady decline. Water consumption structure has been streamlined and the evaluating standard of “water-efficiency city” has been improved.

4. Urban wastewater recycling has been enhanced.

In the 10th Five-Year Plan Period, a study of Policies, Standards and Technology Research and Demonstration of Urban Wastewater Recycling was carried out. Several demonstration projects of urban wastewater recycling were initiated in Beijng, Tianjin, Qingdao and so on, which serve as the foundation for the promotion of water recycling nationwide. Meanwhile, the construction of wastewater treatment facilities and the subsidiary pipe networks has been accelerated, providing the necessary conditions for the reuse of the reclaimed water. As required by the 11th Five-Year Plan, up to 2010, the wastewater treatment rate in the Chinese cities will amount to 70 percent and the volume of the annual treated wastewater will reach around 2.8 million cubic meters. If there is 1/3 of the reclaimed water to be reused, that would be equivalent to the total volume of the diverted water in the middle route of South-North Water Diversion Project. A number of newly built urban wastewater treatment plants will transform from unitary standard water discharge into a comprehensive approach that includes recycling, eco-demand and standard discharge, providing engineering basis and water source for wastewater recycling.

5. Government supervision has been intensified and urban water sector reform has been steadily pushed forward.

In 2005, the Ministry of Construction has issued Opinions on Enhancing the Supervision on Urban Public Utilities and sample documents on franchising operation of urban water supply, wastewater treatment and solid waste treatment. With a view to encouraging different parties to participate in the investment, construction and operation of urban water supply, wastewater and solid waste treatment, fully implementing market mechanism, expanding the investing channels, and improving construction and operation efficiency, the regulations are strengthened on supervision of market entrance and exist, operation safety and service quality, operation cost and water tariff in the public utility sector which involves water supply, wastewater and solid waste treatment. Urban water franchising operation system has initially taken shape.

Despite of the unprecedented progress made in the urban water sector during the past five years, water shortage, worsening urban water pollution, and degradation of water ecology are still prominent problems hindering the urban economic and social development.

First of all, there are still substantive safety threats to urban water supply. In some areas, the worsening water sources pollution and the frequent water pollution accidents have seriously threatened the water quality, and it is imperative for water suppliers to strengthen relevant measures in response to the situation. The continuous overexploitation of groundwater not only leads to drastic decline of groundwater level and the water exhaustion at the sources, but also causes the sinking of ground surface and the increasing leaking rate of water pipe networks. The preliminary statistics has shown that there have already been more than 160 areas nationwide where the groundwater has been overexploited with an average of more than 10 billion cubic meters of groundwater in excess of the prescribed amount have been exploited annually. As a result, more than 60,000 square meters of ground surface have sunk with more than 50 cities suffering from sinking of serious degree. In addition, the implementation of the large scale and long distance water diversion projects has made securing the safety of urban water supply an even more arduous task.

Secondly, the development of the urban wastewater treatment has lagged behind, and this trend has not been fundamentally reversed. By the end of 2005, there were still 278 cities across the country having no wastewater treatment facilities. Based on incomplete statistics, at least more than 50 wastewater treatment plants in more than 30 cities operated at only 30 percent of the capacity or did not even come into operation at all due to such reasons as being unable to connect with the wastewater collection pipe networks, lack of funds for operation, etc.. The potential risks of secondary pollution from the wastewater treatment facilities and garbage can be widely found, and the reclamation and reuse of the treated wastewater should be further enhanced. Some manufacturers discharge pollutants in excess of the standards, which seriously impacts on the safe operation of the treatment plants.

Thirdly, the use of water is inefficient in the urban areas. Currently, the water consumption per 10,000-Yuan industrial added value is five to 10 times that of the developed countries, and the leaking rate of the urban water supply pipelines is as high as 20 percent without evidence for improvement. In some regions, water-consuming and highly polluting projects have been blindly implemented, and large lawns and water landscape are some of the favorite patterns beloved of the city governments when pursuing urban development. Some city governments are willing to invest heavily in developing new water sources while neglect the water saving work, which is to put the cart before the horse. As the water tariff reform has not been effective enough to offer the necessary incentives to save water, market has not fully played its fundamental role in allocating the water resources.

Fourthly, there are still weak links in promoting the industrialization of the urban wastewater and garbage treatment. By the end of 2005, there were more than 150 cities across the country where no wastewater treatment fee was collected, and the domestic garbage treatment fee was not introduced at all in two-thirds of the cities nationwide. Even when fees are collected, the rate is too low to cover the construction and operation costs of the wastewater and garbage treatment facilities. Some municipal governments consider the wastewater and garbage treatment projects ordinary investment projects that should be taken care of by investors themselves, so they offer no financial input nor government supervision to these projects. In this case, the potential risks are considerable.

II. The Objectives and Major Tasks for the Development of the Urban Water Sector in the 11th Five-Year Plan

In light of the Outline of the 11th Five-Year Plan for National Economic and Social Development and the Decision Issued by the State Council on Strengthening the Environmental Protection to Implement the Scientific Outlook on Development, the Ministry of Construction has proposed the following targets: a) to complete the renovation of urban water supply pipe networks that have been operating for over 50 years or that are located in the inner city areas and suffer from severe leaking and damage by the end of 2007; b) by the year 2010, the water supply coverage rate in the urban areas should not be lower than 95 percent; c) the central wastewater treatment facilities should be planned and built in all the cities and seats of the county governments with the urban wastewater treatment rate not lower than 70 percent; and d) domestic garbage treatment facilities complying with relevant standards should be built in all the cities with the decontamination rate not lower than 60 percent in these cities. To ensure the fulfillment of the above objectives, the construction sector needs to carry out the following tasks:

1.To ensure the implementation of urban water supply and safety work

With the focus on the improvement of urban water supply quality, the reduction of water pipeline leakages and the expansion of the central water supply facility networks, efforts will be made to continuously renovate water pipe networks, accelerate water technology advancement, bring about the upgrading and renovation of traditional techniques, better the construction of water facilities in small towns and rural areas, develop water supply system in urban and rural areas as well as raise the living standards of rural residents. The construction of urban water supply safety guarantee system will be strengthened, and urban water safety guarantee and emergency systems in cities above medium level in the country will be fully established. In regard to the four kinds of gusty pollutants, namely: organics, pesticides, heavy metals and deadly micro-organisms, emergent pollutant removal techniques and prevention measures will be put forward. Urban water quality inspection and monitoring system will be further improved. Urban water quality monitoring networks will be set up. The full-path management of urban water quality will be carried out and the drinking water safety of urban residents will be secured.

2.To strengthen the construction and operational management of wastewater and solid waste disposal facility networks

Urban wastewater treatment facility construction will be speeded up, especially for small and medium-sized wastewater treatment facilities. The renovation and construction of rainwater and wastewater division systems will be actively pushed forward. The wastewater collection pipeline network in the urban areas will be accelerated. It is expected that the total volume of investment for urban wastewater facility construction will reach 330 billion yuan (US$41.43 billion) for the 11th Five-Year Plan Period. Meanwhile, special focus will be placed on the solution of low-efficiency operation problems of the wastewater treatment plants. It is requested that after the operation of the plants, the actual wastewater treatment rate within one year should not be lower than 60 percent of the designing capacity and that within three years it should not be lower than 75 percent. This shall become the rigid indicator for project acceptance and auditing. Construction, designing and assessing departments shall shoulder relevant responsibilities in this regard.

Efforts in wastewater tariff collection and management will be strengthened in consultation with relevant departments. By the end of this year, wastewater tariff will be charged in all the cities and towns. The level of the charges will be gradually raised, which will be up to 0.8 Yuan per ton in principle, so as to ensure the normal and minor-profit operation of the wastewater treatment plants. Next year and the year after next, wastewater tariff will be charged to all users who have their own water source.

Technological policies, standards and norms concerning sludge treatment in the wastewater treatment plants will be formulated quickly, guiding different localities to build up their own sludge treatment facilities.

Standards and norms of recycled wastewater quality, which is used for irrigation, industry, agriculture will be compiled and completed as soon as possible. It is requested that localities should balance the planning and construction of wastewater treatment and recycling facilities, put forward preferential policies, in consultation with relevant departments, on taxation and prices for urban wastewater treatment and recycling, further push forward water efficiency in public buildings, residential quarters and housing, strengthen the construction and harmonization of different water-saving facilities, promote the recycling and reuse of middle water in buildings and recycled water in residential quarters.

3. To fully push forward the construction of water-efficient cities

Water tariff reform will be actively carried out, water tariff structure will be streamlined and water tariff will be reasonably adjusted. Water-saving systems will be strictly implemented, technological renovation for industries will be accelerated. Production techniques and equipments which have big water consumption and technical backwards will be removed according to laws and regulations in order to raise the reused rate of industrial water. Water-saving utensils for domestic uses will be spread. It is required that, in all public and civic buildings which are newly built, rebuilt and extended, utensils meeting the standards of Water Efficient Utensils for Domestic Uses shall be installed. Those that do not meet the standards and are used in the existing buildings shall be quickly removed and renovated. The water-saving, water standards and regulatory system will be improved. The management of underground water exploitation and utilization in the city-planned areas shall be strict. The public awareness for water efficiency should be strengthened. The inauguration of water-efficient cities will be further encouraged. Cities that have won the title of “water-efficient city” shall be strictly re-checked and those not meeting the standard shall be eliminated.

4. To deepen the reform of urban water supply and wastewater treatment facility construction and its operational mechanisms

Construction funds shall be channeled in various ways to speed up the construction of wastewater treatment facilities. Systematic reform of wastewater treatment facility investment will be carried out and the investment will be brought into full benefits.

Competitive mechanisms will be brought in. The franchising operation system will be fully implemented. Institutions responsible for urban wastewater treatment will be transformed into enterprises.

Preferential policies in land use, electricity and taxation for urban water and wastewater treatment will be studied and formulated in consultation with relevant departments in order to facilitate the healthy development of wastewater treatment sector.

Inspection and monitoring will be strictly implemented for quality, cost and safe operation of urban water and wastewater treatment enterprises. Capacity building for the inspection and monitoring will be strengthened.

III. International Exchange and Cooperation is Strengthened to Boost the Development of China’s Urban Water Sector

With a view to solving water problems in China, ensuring the safety of urban water supply, and promoting the utilization of reclaimed water, we need to intensify the international exchange and cooperation and bring in successful experiences and advanced technology from abroad. By doing this, we could develop independent innovation capability in the urban water sector, and achieve the accelerated development.

Upon the approval of the State Council, the Ministry of Construction, together with International Water Association will host the 5th World Water Congress from September 10th to 14th this year. It is the most appealing international event in water sector to facilitate academic exchanges, dissemination of new technologies and products. Up to now, the Congress has been held for 4 times, which has aroused extensive attention in the world. It assembles top experts, world-class equipment manufacturers, government officials, famous water companies, and excellent association members. The State Council attaches great importance to this year’s Congress, since it is the first time for Asia to be the host. Vice Premier Zeng Peiyan acts as honorary president and will deliver a keynote speech in the Congress. The People’s Congress, National Political Consultative Conference, and more than 10 relevant departments under the State Council including National Development and Reform Commission, Ministry of Science, Ministry of Finance, and State Environment Protection Administration, have formed the organizing committee.

The theme of this year’s Congress is to ensure water safety, to promote sustainable utilization of water resource, to response to global challenge of water management, and to achieve the harmony between human beings and water environment. Nearly 3000 experts, scholars and government officials working in the water sector worldwide will conduct academic discussions and extensive exchanges on seven topics, namely, urban water management, drinking water treatment, wastewater treatment, wastewater recycling and non-conventional water treatment system, water resource and rive comprehensive management, operational management of drainage system, health and environment. There will be eight key speeches, more than 20 forums, more than 650 technology exchanges and 140 essay posters. In the meantime, the congress will host expo of new water treatment technologies and equipments to exhibit the advanced and proper technologies, equipments, typical ethnics, and project cases on water supply, water saving and wastewater treatment home and abroad.

The congress has set up China Water Day, Mayor Forum and International Seminar on Rural Wastewater Treatment, inviting government officials from MOC, NDRC, and SEPA, some mayors who have done good job on water environment control, and famous scholars to make key speech, summing up the achievements of water sector in China, awarding the cities excel at water environment control, and exchanging experiences on rural waste water treatment. Currently, all the preparatory work of the congress is going well. The registration work, essay collection, and forum preparation are underway. With concerted efforts, all the departments and institutions under the Organizing Committee of the Congress have been fully prepared for the opening of the Congress.

(China Development Gateway August 22, 2006)