Water prices in cities are below the cost and there is room for further price hike, said Qiu Baoxing, vice construction minister, Tuesday.

But the ministry will take into consideration of the income level of the majority citizens when raising the water price, and make it affordable, said Qiu at a press conference held by the State Council Information Office.

Qiu did not reveal whether the ministry will raise the water prices soon.

The water prices in many countries are composed of costs for water resources, water transmission projects, water disposal and management as well as sewage recycle, said Qiu. But in China, the price only covers the costs for water transmission projects, water management and sewage recycle, making it below the actual water cost.

A survey by the ministry in 2004 found that the average household water expenditure only accounted for 1.8 percent of the household income in Beijing, which registered the highest water price in China. Qiu said the upper limit of this ratio set by the World Bank for the developing countries is 5 percent.

The ministry will expand the pilot projects of differentiated water prices to more Chinese cities, said Qiu. The municipal government sets a quota on water consumption for each household, and once you exceed the quota, you have to pay much more for per unit of water consumption.

Compared with raising the overall water price, the pilot differentiated water prices scheme have been hailed by Chinese citizens, said Qiu.

(Xinhua News Agency June 8, 2005)