A Study On Water Pricing Of Ningbo City

Ningbo is among the cities confronting with shortage of water resources, with the percapita water volume of1260cubic meters, only accounting for59%of the province’s average,and55%of the nation’s average. Water supply pressure has been largely increased.Meanwhile, water consumption remains remarkable. According to the “2012Ningbo bulletin”,per capita water consumption is about200-250L/day during2008-2012which is higher thanthat in most European developed countries. The gap between supply and demand waterresources has to be met by outsourcing more than35000000cubic meters, accounting formore than5%of the total supply over last5years. The situation has resulted in financialdifficulties for Ningbo City Water Company.Based on the above situation, this paper focuses on the water price system, the keysegment of the water supply and demand regulation. Firstly this paper analyzes the theoreticalfoundation of water pricing, in which the author put forward that the quasi public goodsattribute is the basis of water pricing. Water pricing affects the public welfare to a large extent,so the regulation authority has take into account the externality, the rigidity of demand andprice elasticity as well. Secondly, the water pricing system of the developed countries and thedomestic major cities is compared to provide revelation for Ningbo. Thirdly, the articleexamines Ningbo tap water price formation mechanism and the main problems existing in thecurrent pricing system, including administrative monopoly, price formation party twist, andwater supply cost lack of transparency and hard constraints, incompatible with the cityeconomic development level and the residents’ water consumption habits, failing to promotewater conservation. Finally, aiming at the above problem, the author put forward somesuggestions to improve the price system of water, using a combination of quantitative andqualitative analysis methods, which contains:1)reforming the property rights of supplier tointroduce competition;2)establishing public supervision of water supply cost, strengtheningits operation status to improve the cost the pricing transparency;3)making the urban residentsperform a remarkable role in the price schedule;4)reestablishing tier water pricing systembased on the price elasticity and habits of water consumption.