Liquid Assets V: The Water Tales of Hong Kong and Singapore: Divergent Approaches to Water Dependency

Su Liu Jessica Williams January 2014 About Civic Exchange

Civic Exchange is a Hong Kong-based non-profit public policy think tank that was established in 2000. It is an independent organisation that has access to policy makers, officials, businesses, media and NGOs – reaching across sectors and borders. Civic Exchange has solid research experience in areas such as air quality, energy, urban planning, climate change, conservation, water, governance, political development, equal opportunities, poverty and gender. For more information about Civic Exchange, visit www.civic-exchange.org.

About the Authors

Su Liu is Head of Great China & Water Policy Research of Civic Exchange. Her work in Civic Exchange covers mainly water related policy research and China related project coordination. Su has produced several water policy reports, including; Liquid Assets II, Industrial Relocation in Guangdong Province, Liquid Assets IIIA, Dongjiang Overloaded, Liquid Assets IIIB, A Photographic report of the Dongjiang Expedition and Liquid Assets IV Hong Kong’s Water Resources Management under “One Country, Two Systems”. Su was a former public opinion researcher (Deputy Managing Director of the Gallup Organisation Hong Kong), and a communication strategist (Deputy Managing Director of Wirthlin Worldwide Asia).

Jessica Williams grew up and lives in Hong Kong. She completed her MSc in International Relations at Cardiff University and has a BA in law from Exeter University. For her Master’s thesis, Jessica researched and assessed China’s water policies and their international implications. Her research is primarily focused on Asian water security, particularly on China’s water situation and national and international implications this will have.

Jessica recently worked with Civic Exchange as a research intern. During her time at Civic Exchange, Jessica focused on the complicated water relationships between Hong Kong and China, and Singapore and Malaysia. She is hoping to continue research into Asian water issues by undertaking a PhD.

2 Preface & Acknowledgements

This report represents Civic Exchange’s second attempt this year to examine Hong Kong’s water strategy. By examining the paths and actions that Singapore has taken to address their water scarcity issues, Hong Kong can reflect on its previous and current approaches to water dependency and consider the way forward. In July 2013, we also published a report focusing on Hong Kong’s water resources management under “One Country, Two Systems”. It is believed that Hong Kong should take actions to enhance its water self-reliance, especially as Dongjiang is under growing pressure due to increased demand for water from five other cities in the Pearl River Delta.

We hope these reports will inform people in Hong Kong about the challenges we are facing in the water policy domain, and help facilitate the much-needed discussions in the community without further delay.

I thank the authors Su Liu and Jessica Williams for completing this research, and Simon Harris for editing this report. DESIGNORM helped to lay out and design the report, and a number of colleagues and collaborators facilitated the production of this report, including Berton Bian, Olivia Chen, Bryan Suen, Michelle Wong, Rae Leung, Simon Ng, and William Leverett. We are also grateful to the Noble Group for their financial support.

Yan-Yan Yip Chief Executive Officer December 2013

3 Table of Contents

Glossary of Acronyms ...... 5

Executive Summary ...... 6

1. Introduction ...... 9

2. Evolution of Water Policies ...... 11 2.1 On the Same Track: Responding to Population growth ...... 11 2.2 Turning Point: Water Rationing and Solutions in the 1960s ...... 17 2.3 Evolution of water policies ...... 18 2.4 Water Contracts and Water Relations...... 26 2.5 Managing Disputes ...... 32

3. Current Water Policies ...... 38 3.1 Policy Bureaux Overseeing Water Resources Management ...... 38 3.2 Policy Framework...... 39 3.3 Actions and implementation ...... 43 3.4 Other Water Saving Initiatives ...... 50

4. Discussion & Policy Recommendations ...... 54 4.1 Singapore’s water success formula ...... 54 4.2 The Achilles Heel of Singapore’s Water Ambitions...... 56 4.3 The Hong Kong Water Story ...... 57 4.4 Opportunities for Hong Kong ...... 64 4.5 Policy Recommendations...... 68

Appendix 1 ...... 70

Appendix 2 ...... 71

Appendix 3 ...... 73

Endnotes ...... 74

4 Glossary of Acronyms

3P Approach People, Public and Private approach CPPP Cleaner Production Partnership Programme DJ Allocation Plan Dongjiang Basin Water Resources Allocation Plan DSD HKSAR Government Drainage Services Department EWI Programme Environment and Water Industry Programme HKPC Hong Kong Productivity Council HKSAR Hong Kong Special Administrative Region HKUST Hong Kong University of Science and Technology ITC Innovation and Technology Commission ITF Innovation and Technology Fund kWh/m3 Kilowatt-hour per cubic metre LNG Liquefied Natural Gas mcm Million Cubic Meters MEWR Ministry of the Environment and Water Resources of the Republic of Singapore PRD Pearl River Delta PUB Public Utilities Board (formerly known as the national water agency of the Republic of Singapore) R&D Research and Development RM Malaysian Ringgit RMB Chinese Yuan RO Reverse Osmosis SSEZ Shenzhen Special Economic Zone SANI® Process Sulphate reduction, Autotrophic Denitrification and Nitrification Integration Process TWM HKSAR Government’s Total Water Management WSD HKSAR Government Water Supplies Department

5 Executive Summary

Hong Kong relies on Guangdong’s East River (the Dongjiang) for 70- 80 per cent of their fresh water supply. The River is shared with five cities in the Pearl River Delta Region under the Dongjiang Basin Water Resources Allocation Plan. The Plan is set at the maximum usable water resources limit and is unlikely to have surplus capacity in the future.

The river is under increasing pressure from industrialisation, urbanisation and population growth, therefore, reductions in the available volume of Dongjiang water are very possible in the not-so- distant future. This could cause tension in the region and pose a direct threat to Hong Kong’s well-being.

In the belief that we must prepare for such an eventuality, this report leverages water-sustainability models from elsewhere. Singapore’s handling of its water resources makes a relevant example for Hong Kong as the two ‘coastal cities’ share many geographical and proportional similarities, and Singapore has made great progress towards achieving water self-sufficiency. Examining key factors and how they drive the two cities’ approaches to the issue can provide the keys to a future sustainable water plan for Hong Kong.

In the early years, as population-driven water needs grew, both cities responded by increasing their local catchment capacities. However, both cities met severe bottlenecks in the early 1960s when supply shocks and severe droughts forced them into bouts of extreme water rationing, and both needed to find long-term solutions.

The year 1965 was a watershed year for both cities.

For Hong Kong it marked the start of a one-way approach that has fostered water dependency ever since. For the pragmatic colonial government, the DongShen negotiations were a simple commercial transaction. Far more importantly for Mainland policy makers was the DongShen’s role as a driver of their Eight-word Policy –“long-term planning and full utilisation (長期打算，充分利用)” towards Hong

6 Kong. Solving Hong Kong’s long-term water supply helps safeguard the core need for stability of the Chinese Communist Party. Since the reunification in 1997, both sides have fully embraced water dependency.

In contrast, Singapore’s gaining of political independence in 1965 provided a completely different drive away from water dependency. Although receiving cheap water from Johor was convenient and constitutionally guaranteed for 100 years, water could no longer be viewed as a mere commodity. It was an issue of “life-and-death” at a national security level.

Hong Kong’s water-affairs are administered under a segmented departmental structure and ultimately overseen by the Financial Secretary. The final call in justifying water policy decisions is purely economic, overshadowing the long-term benefits of water innovation and the public goods of sustainability and self-resilience.

In comparison, Singapore has one national water agency – Public Utilities Board (PUB). PUB charts its Water Master Plan and has power to decide on water investments that help meet the long-term sustainable development needs of the city state.

Visionary leadership and well-funded campaigns to rally public action are also important drivers of Singapore’s water success. The island’s leadership has always positioned water at the top level of public concerns and PUB has managed water in a closed loop from supply to discharge. Singapore’s water success can be seen in its development of a sizable water-based economy.

In contrast, Hong Kong seems half-hearted. Its so-called Total Water Management strategy does not manage water in a closed loop. Its water tariff structure has not been reviewed since it was set in 1995, and it continues to ignore the entire cost of seawater used, which accounts for over 20 per cent of total water consumption. Hong Kong’s taxpayers subsidise over 60 per cent of the cost of fresh water, and 100 per cent of seawater.

Nevertheless, Singapore’s water success does have an Achilles’ heel. Reclamation and desalination activities are both energy intensive, and thus expensive. Plus, Singapore depends on neighbouring Malaysia and Indonesia for most of its electrical energy. Although Singapore is

7 trying to diversify its energy sources, it does seem to have replaced water vulnerability with energy dependency.

Hong Kong is in a similar position, depending on Mainland China for both water and energy. As global citizens in an era of climate change, people should strive to stand on their own two feet. One way or another, Hong Kong will eventually be forced to become more self-resilient, if only in order to take more responsibility as a regional partner and become an even stronger contributor to China’s development.

Opportunity accompanies crisis. Great possibilities lie ahead for Hong Kong if it chooses to grasp them. Although it lost its innovative impetus in the late 1980s, it was once a pioneer with its unique seawater flushing system and has made ground-breaking progress in recent years by leveraging on past experience.

The world’s population has shown a great tendency in recent years to urbanise in coastal regions. In this era of “living on the edge”, Hong Kong’s long-term experience in the constructive use of highly- corrosive seawater and effective waste water treatment facilities as a coastal city is a saleable asset.

With enthusiastic policy direction and sufficient support to close its own water loop and further advance its multiple water systems, Hong Kong could become a water-knowledge hub for coastal China and beyond.

If we do not grasp this chance, others will.

8 1 Introduction

Hong Kong’s Hong Kong sources most of its potable water from the Dongjiang water source is River in China and our community generally sees this as a secure threatened so its supply could and guaranteed arrangement. Under the “One Country, Two be reduced Systems” and given the large sums Hong Kong pays for this convenience, it seems unlikely that Mainland authorities will ever cut off supply. However, after investigating the issue, it appears that reductions in the available volume of Dongjiang water are possible in the not-so-distant future. Based on the belief that people in Hong Kong must prepare for such an eventuality, this report examines water sustainability models elsewhere to propose answers to the vital question of Hong Kong’s future water security.

The Dongjiang The Dongjiang River is under increasing pressure from River supplies industrialisation, urbanisation and a growing population in the Hong Kong and five PRD- Pearl River Delta (PRD) region. The twin problems of increasing cities at its pollution and demand have resulted in all the Mainland cities maximum water under the Dongjiang Basin Water Resources Allocation Plan1 (the capacity. Hong DJ Allocation Plan) approaching or surpassing their allocations by Kong needs 2 th sustainable 2010 . Furthermore, under the 12 Five-year Plan, Guangdong solution has to lower its water consumption from 46,960 million cubic metres (mcm) to 45,800 mcm and with 40 million people in the PRD, it seems likely that Hong Kong’s seven million will eventually be affected. Hong Kong’s current water policies, which depend on continued reliance on Dongjiang water, have been criticised as being “short-sighted”4. The HKSAR Government needs to start looking at ways to manage and conserve its own water resources better, to help ease the pressure on an increasingly thirsty Guangdong Province.5

Singapore’s Singapore’s handling of its water resources is a relevant example handling of its for Hong Kong as it has much in common with the the Special water is relevant Administrative Region. Both cities are in a similar situation as to Hong Kong they are naturally water-scarce. This has resulted in both cities importing water and essentially becoming dependent on an outside government. However, the two have taken dramatically

9 different approaches to this problem. Singapore has made great progress in moving towards water self-sufficiency, while Hong Kong seems content to continue its reliance on an increasingly threatened external source.

Examining several key factors and how they drive the two cities’ approaches towards water dependency could, therefore, provide keys to a sustainable future water plan for Hong Kong.

10 2 Evolution of Water Policies

2.1 On the Same Track: Responding to Population Growth

2.1.1 Population Growth and Water Stress Both cities’ Both cities’ water resource management systems are primarily water population-driven (Chart 1). Water consumption rises in simple management is population correlation with population growth. Securing more water has driven been a constant challenge for both cities since their early days.

Chart 1: Population and Water Consumption (1970s-2010s)

8 1,000 900 7 800 6 700 (mcm/year) 5 600 (millions) 4 500 400 3 Population 300 2

200 consumption Water 1 100 0 0 1971 1970 1981 1980 1991 1990 2001 2000 2011 2010 Year*

Hong Kong population6 Hong Kong water comsumption7 Singapore population8 Singapore water comsumption9

Year*: Hong Kong’s year marks start from 1971 with 10-year intervals and Singapore’s year marks start from 1970 with 10-year intervals.

11 Quick Facts 1: Population and Density of Hong Kong and Singapore

Hong Kong and Singapore both have growing populations and high population densities. By 2031, the populations of each city will have increased by over a million people and this will translate directly into a higher demand for water. Despite the projected increased strain on water resources, governments still generally encourage population growth for the sake of commercial and industrial development (see population projections by the two cities for 2041 and 2060).10

Population and Density of Hong Kong and Singapore (2012) Hong Kong11 Singapore12 Population (millions) 7,154.6 5,312.4 Population density (people/km2) 6,620 7,422

Population Projections for Hong Kong and Singapore (millions) Hong Kong13 Year Population 2011 7.02 2021 7.66 2031 8.16 2041 8.47

Singapore14 Year Population 2010 5.08 2020 5.8 – 6.0 2030 6.5 – 6.9 2060 7.0

12 2.1.2 Prioritising Local Catchment and Storage Capacity Both cities are Geographic features of the two cities, including weather and well below the rainfall, have shaped their approaches towards water catchment United Nations water scarcity and storage. In terms of weather, Hong Kong has four seasons benchmark while Singapore has only two. Both places enjoy ample rainfall and are subject to oceanic climate. In the case of Singapore, rainfall is constant throughout the year. However, both cities face the challenge of fresh water scarcity. Hong Kong’s per capita natural fresh water resource is only 150 cubic metres (m3)15, while Singapore’s amounts to 211 m3,16 placing both cities well below the United Nations water scarcity benchmark of 1,000 m3.17 Their small sizes also mean that both have extremely limited groundwater resources and possess few rivers or lakes of notable size. This has made them look eagerly to maximising their ample rainfall retention as natural sources by setting aside more areas of land for water catchment.

Hong Kong and A third of Hong Kong’s land is protected as designated water- Singapore use gathering ground and the territory has 17 reservoirs. Owing to 1/3 and 2/3 of their land the shortage of suitable land, two reservoirs (Plover Cove and respectively High Island) were built in natural bays of the sea.18 Some 45 years for water ago, Plover Cove Reservoir was a global innovation that set a new catchment direction for coastal regions pursuing extra catchment capacity.19 Singapore has made even more of an effort to maximise its water catchment area, with two-thirds of the island’s land currently used for water catchment; and it is looking to increase this to 90 per cent by 2060. Singapore has also built 17 reservoirs, including one in the sea (Marina Barrage), and it has dammed several of its rivers.20

Hong Kong Table 1 illustrates the two cities’ reservoirs and storage capacities. stopped It is clear that both, up until the 1980s, focused on reservoir increasing its water storage building as the main solution to the problem of fresh water capacity since scarcity. However, Hong Kong stopped capitalising on this water 1979, while source upon the completion of its last reservoir in 1979, while Singapore Singapore has continued building on in the new millennium. continued expansion The biggest fresh water reservoir in Singapore – the Marina Reservoir – was completed in 2008, and boosted the city’s total storage capacity significantly, alone supplying up to 10 per cent of total demand.21 Marina Reservoir is also Singapore’s first fresh water reservoir built in a natural bay of the sea.

13 Table 1: Reservoirs in Hong Kong and Singapore Hong Kong22 Singapore23 Year of Name Storage Year of Name Storage completion capacity completion capacity24 (mcm) ( mcm) 1863 Pok Fu Lam 0.233 1894 MacRitchie 4.2 Reservoir Reservoir 1888 Tai Tam Upper 1.49 1912 Lower Peirce 2.8 Reservoir Reservoir 1904 Tai Tam Byewash 0.08 1969 Lower & 24.1 Reservoir Upper Seletar Reservoirs 1907 Tai Tam 0.686 1974 Upper Peirce 27.8 Intermediate Reservoir Reservoir 1910 Kowloon 1.578 1975 Kranji 22.5 Reservoir Reservior 1917 Tai Tam Tuk 6.047 Pandan Reservoir Reservoir 1926 Kowloon 0.121 1981 Murai 31.4 Reception Reservoir Reservoir 1929 Shek Lei Pui 0.374 Poyan Reservoir Reservoir 1931 Kowloon 0.8 Sarimbun Byewash Reservoir Reservoir 1932 Aberdeen Upper 0.773 Tengeh Reservoir Reservoir 1932 Aberdeen Lower 0.486 1981 Pulau Tekong Est. 6 Reservoir Reservoir 1937 Shing Mun 13.279 Jurong Lake Reservoir Reservoir 1957 Tai Lam Chung 20.49 1984 Bedok 23.2 Reservoir Reservoir 1963 Shek Pik 24.461 Sungei Seletar Reservoir Reservior 1965 Lower Shing Mun 4.299 2008 Marina Est. Reservoir Reservoir 66.4 1973 Plover Cove 229.729 2011 Punggol Reservoir Reservoir 1979 High Island 281.124 2011 Serangoon Reservoir Reservoir Total Storage 586.05 Total Storage 142 Capacity (mcm) Capacity (mcm, pre-200425)

14 Quick Facts 2: Geographic Features of Hong Kong and Singapore

Both Hong Kong and Singapore are coastal cities. Hong Kong has a total land area of 1,104 km² and a land connection with Mainland China while Singapore’s land mass is 716.1 km², which is substantially smaller than Hong Kong, and it is completely detached from Malaysia.

Hong Kong’s terrain is mainly hilly to mountainous with steep slopes and lowlands in the north. In contrast, Singapore is mostly lowland with a gently undulating central plateau that contains natural water catchment areas and nature preserves.

Geographic Features of Hong Kong and Singapore

Hong Kong Singapore Land area (km2) 1,10426 716.127 Elevation (m) 0 – 95728 0 – 16629 Average annual temperature (°C) 10 – 3130 24 – 3231 Average annual precipitation (mm) 1,924.732 2,096.233 Wettest month July34 December35 Driest month March36 February37

Hong Kong Singapore

15 2.1.3 Water Importation Hong Kong Despite efforts to utilise local resources, both cities must import has increased water to meet demand. In the first decade of the DongShen its reliance on water imports Project (details in section 2.3.1) , under which water is supplied to 70-80 per to Hong Kong, Hong Kong sourced about 20-30 per cent of its cent of its total total supply from Guangdong Province. The amount progressively fresh water increased such that the Project supplied nearly half of Hong consumption Kong’s potable water. Soon after the signing of the Sino-British Joint Declaration in 1984, imports increased to meet around 70-80 per cent of total demand, and they continue to supply the majority of Hong Kong’s daily needs (Chart 2).

Chart 2: Dongjiang Fresh Water Resources: Imported vs Local Supply (1965 - 2012)38 ( mcm) 100 1984 Sino-British 90 Joint Declaration 80

70 Imported water 60 Local water supply 50

40

30

20

10

0 year 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Singapore has At the beginning of the 1960s, Singapore sourced almost all of decreased its its water from neighbouring Johor in Malaysia.39 However, unlike reliance on Hong Kong, it then progressively decreased the proportion of water imports by 50 per cent imports through the development of local catchment and storage capacity. By 2003, it claimed it was able to fulfil almost half of its requirements locally.40 However, Malaysian official data suggests that Singapore was importing a much higher proportion of its water from Johor, 60-90 per cent.41 In either case, Singapore does appear to have reduced its reliance on imported water by at least 50 per cent.42

16 2.2 Turning point: Water Rationing and Solutions in the 1960s

The early 1960s was a significant time for both cities’ water policy development.

2.2.1 Water Rationing Levels In 1963 In June 1963, Hong Kong imposed its most severe level of both cities rationing. Residents were supplied with four hours of water every experienced 43 their worst and four days for an entire year. At about the same time, from April longest water 1963, Singaporeans experienced a 12-hour rationing system. rationing Rationing was initially applied by zones but then had to be quickly extended to the entire island. Singapore’s entire supply was then suspended every day from 8:00 am to 8:00 pm for about ten months.44 Both events marked the worst and longest water rationing in history for both cities.

1965 was a 1965 was another key year for both cities. Both realised that, if water-policy they remained complacent, they could be brought to their knees turning point for both cities in the future over water-related matters. 2.2.2 Two Cities’ Responses Hong Kong In 1965, the In 1965, Hong Kong’s long-term water policy direction took off DongShen when the DongShen Project (initiated in 1960) formally started to Project began supplying supply water from Guangdong’s Dongjiang River. Hong Kong, at water to Hong the same time, initiated several other innovative solutions. Aside Kong from building fresh water reservoirs where once there was sea, it also legislated to install the world’s only dual-supply system, in which seawater is used for toilet flushing and allowing fresh water to be used for other purposes. However, not all of Hong Kong’s innovations succeeded. Its attempt to build, what would then have been the world’s largest desalination plant, proved too ambitious and was abandoned in 1992.45

Singapore Singapore went Also in 1965, Singapore split from Malaysia and became an independent independent city-state. Singapore’s two water supply agreements with two with Johor were signed at about the same time as the DongShen constitutionally guaranteed Project started, but Singapore’s arrangements have had a very water different outcome. Singapore’s 1961 Agreement expired on agreements 31 August 2011, and was not renewed. Its second, the 1962

17 Agreement, will expire in 2061 and the government has already announced that it has no intention of renewing it. Singapore realised that it could let these agreements lapse as they had implemented innovative local solutions, such as NEWater and desalination.46 These arrangements have turned Singapore from a water-scarce city into “a city of gardens and water”.47

2.3 Evolution of Water Policies

The different Both cities learnt a lesson from the hardship water rationing sovereign imposed on all factions of society, but they did not come to the status of the same political solutions. The different sovereign statuses of the cities results in differing two cities coloured their approaches towards water dependency. solutions It is in this area that one of the main differences between the two cities emerges.

2.3.1 Political Considerations in Searching for More Water The Hong Kong Approach – One-Way Road to Potable Water Dependence a) The DongShen Project Hong Kong has taken a one-way approach, which has led to water dependency ever since the DongShen agreement came into the picture in the early 1960s.

The DongShen For the colonial government, the DongShen negotiations were a Project secured matter of business. Water was considered a commodity and the the core import of water was merely a commercial transaction. For the interests of the Chinese Chinese government, commercial consideration was only one of the Communist many facets of the deal: the underlying political intention, enabling Party but the Central Government’s Eight-words Policy – “Long-Term Planning was seen as and Full Utilisation (八字方針 ─ 長期打算，充分利用)” to be applied to a commercial transaction by Hong Kong, was a far more important driver. In short, solving Hong the colonial Kong’s long-term water shortage safeguarded the core interests of government the Chinese Communist Party.48

b) The DongShen’s Role in Sino-British Negotiations over the Handover of Hong Kong Hong Kong’s While the DongShen deal has stabilised Hong Kong’s water water supply needs, the British found themselves in an even more dependency was embraced by all “indefensible” position in the Sino-British negotiations about parties pre- and Hong Kong Island. The project quickly became Hong Kong’s post- 1997 “life-blood”. The fact that Hong Kong was a “borrowed place on

18 borrowed time” made the water tie with Mainland China stronger because it suited the long-term needs of both the colonial and Chinese governments. Water dependency was, therefore, embraced by both, before and after reunification.49

c) Current and Future Trends of the Dongjiang Water Supply Hong Kong will The Dongjiang currently accounts for 70-80 per cent of Hong remain 70-80 Kong’s fresh water supply (Table 2) and will remain Hong Kong’s per cent water dependent on a dominant source for the foreseeable future. However, the River’s threatened and quality and capacity is increasingly threatened, but Hong Kong shared water seems content to continue its reliance. Hong Kong bases its source water resources management on its entitled maximum allotment of 1,100 mcm per annum which was set in 2008 under the DJ Allocation Plan.50 There are five cities in the Donjiang Basin, Guangzhou, Shenzhen, Dongguang, Huizhou and Heyuan that are also included in the plan and have fixed water allotments. It should be noted that the allotments for each of these cities has been set based on the maximum possible amount of water that the river can supply.

Table 2: Breakdown of Hong Kong’s Water Resources (1998-2011)51 Year Rainfall Including Seawater Fresh Water (mm) (%) only (%) Local Dongjiang Seawater Local Dongjiang Yield Water Yield Water 1998 2,564.6 20 63 17 24 76 1999 2,129.1 10 70 20 13 87 2000 2,752.3 22 59 19 27 73 2001 3,091.8 24 58 19 29 71 2002 2,490.0 20 60 19 25 75 2003 1,941.9 20 61 19 25 75 2004 1,738.6 9 69 22 12 88 2005 3,214.5 22 58 20 28 72 2006 2,627.8 27 52 22 34 66 2007 1,706.9 16 61 23 21 79 2008 3,066.2 26 52 22 34 66 2009 2,182.3 18 60 22 23 77 2010 2,371.7 19 58 23 25 75 2011 1,476.7 9 69 23 11 89 2012 1,924.7 18 59 23 23 77

19 d) Seawater Flushing System Hong Kong uses Even though Hong Kong was “outsourcing a significant amount of seawater for water” to Guangdong, it was still highly water-stressed. In the late flushing, which 1950s, Hong Kong started the installation of its dual water supply accounts for 20 per cent of system52. The use of seawater makes up about 20 per cent of water use Hong Kong’s total water usage, and forms a stable component of its total supply (Chart 3).

Chart 3: Breakdown of Hong Kong’s Water Sources (2012)53

18%

59% Imported water 23% Local catchment Seawater

Singapore’s Approach in the Context of Political Considerations a) Life-And-Death In contrast, for Singapore, becoming an independent city-state meant that all means of reducing its water dependency on an outside source needed to be thoroughly explored. Water was no longer viewed as just a commodity, but rather as a “life-and- death” issue at the national security level.

b) Holistic Approach Singapore Actively looking to reduce its dependency, Singapore has taken a is politically highly proactive approach through a 50-year plan. The plan aims independent so reducing to diversify the city’s supply from a major single foreign source dependency is (Johor) to various alternatives available within the state (Chart 4). a life-and-death This will be further discussed. issue Chart 4: Breakdown of Singapore’s Water Sources (2012)54

10%

Local catchment 40% 30% Imported water Reclaimed water (NEWater) 20% Desalinated water

20 Quick Facts 3: Economic Activities of Hong Kong and Singapore

Hong Kong and Singapore both have strong economies despite their scant natural resources. Singapore has a higher per capita GDP than Hong Kong.

Gross Domestic Product (GDP) of Hong Kong and Singapore in 2012 Hong Kong55 Singapore56 GDP (million US$) 243,682.15 270,053.46 per capita GDP (million US$) 36,651 52,113

Both economies are service-based. Neither requires a large amount of water for heavy manufacturing or agriculture.

Breakdown of GDP by Economic Activity (per cent)

Manufacturing Construction Hong Kong (2011)57 Utilities Manufacturing 2 Utilities 2 Construction 3 Services 93 Services Others 0 Total 100

Construction Singapore (2013)58 Utilities Manufacturing 19.5 Utilities 1.5 Construction 4.1 Manufacturing Services 64.0 Others Services Others 10.9 Total 100

21 2.3.2 Water Consumption and Demand Management Consumption Patterns Water demand Both cities continue to grow, and both economies are service- is mainly from based, with little heavy industry. Therefore, a large proportion of the domestic 59 sector for both their water demand comes from the domestic sector (Table 3). cities This requires both cities to put a high priority on demand-side management.60

Table 3: Fresh water use (Breakdown by Sector) Hong Kong (2011)61 Singapore (2013)62 Sector Percentage Sector Percentage Domestic 54.1 Domestic 53 Construction/ 1.5 Shipping 0.4 shipping Government 4.5 Government and 6.74 Establishments Statutory Boards Industry 6.3 Commerce/ 39.9 Industry Service Trade 25.6 Flushing 8 Total 100 Total 100

Effectiveness of Demand Management Singapore is In the past ten years, Hong Kong’s population grew by 6.6 per cent more effective (less than half a million people) and GDP increased by 55 per cent. at managing Total water consumption and per capita domestic consumption water demand both changed marginally. Over the same time, Singapore’s population increased by 29 per cent (over 1 million people) and its GDP increased by 123 per cent (more than double) with 40 per cent more total annual water consumption. However, it has reduced its per capita domestic consumption by nearly 10 per cent (Table 4). Singapore seems to have been more effective in managing its water demand.

22 Table 4: Comparison of Population, GDP and Water Consumption

Population Per Capita GDP Total Annual Water Per Capita Water (millions) (US$) Consumption Consumption (mcm) (litres/day) Year Hong Kong63 Singapore64 Hong Kong65 Singapore66 Hong Kong67 Singapore68 Hong Kong*,69 Singapore#,70 2003 6.731 4.115 23,559 23,319 1,215 447 213 165 2004 6.784 4.167 24,454 27,046 1,210 439 219 162 2005 6.813 4.266 26,092 29,400 1,231 440 216 160 2006 6.857 4.401 27,699 33,090 1,223 519 219 158 2007 6.916 4.589 29,900 38,763 1,222 534 226 157 2008 6.958 4.839 30,865 39,384 1,231 552 222 156 2009 6.973 4.988 29,882 37,860 1,223 562 227 155 2010 7.024 5.077 31,757 45,640 1,206 597 224 154 2011 7.112 5.184 35,100 51,237 1,193 603 225 153 2012 7.174 5.312 36,590 52,051 1,208 628 220 152 * Each value in this column refers to the sum of Per Capita Domestic Fresh Water Consumption and Per Capita Flushing Water (Fresh Water & Seawater) Consumption in the corresponding financial year. # Each value in this column refers to the Per Capita Domestic Fresh Water Consumption in the corresponding calendar year.

Future Challenges and Targets Hong Kong’s Hong Kong’s per capita fresh water consumption has gradually per capita increased from 113 litres of fresh water a day in 1993 to 125 litres domestic consumption a day in 2012. Once seawater is accounted for, Hong Kong’s total is much domestic per capita consumption increases to 220 litres a day higher than (2012)71. This is substantially more than Singapore’s 152 litres a Singapore’s day72.

Singapore The world average per capita domestic water consumption is aims to 170 litres a day, and many European cities, including Barcelona, further reduce Copenhagen and Hamburg, have managed to reduce their usage consumption 73 to 140 litres a to around 100 litres a day. In this regard, both Hong Kong and day while Hong Singapore have substantial room for improvement. Singapore Kong has no is aiming to do this by reducing its domestic per capita daily target consumption to 140 litres by 203074. In contrast, Hong Kong has not set any targets yet.

2.3.3 Water Tariffs The two cities price water in a very different manner. Water pricing can be a tricky problem for governments, as raising the cost of basic commodities is politically sensitive and can lead to social unrest. However, keeping prices artificially low creates the potential for water to be undervalued and wasted. It is, therefore,

23 important for cities to strike a balance between social stability and water conservation.75

Hong Kong Water tariffs Hong Kong’s water tariffs are among the lowest in the world; are set they are heavily subsidised by taxpayers and have remained artificially low virtually unchanged since 1995.76 Supply is charged through a four-tier system but at a very low rate and the first 12 m3 are free (Table 5). Seawater for toilet flushing, which accounts for 22 per cent of Hong Kong’s water use, has always been supplied and disposed of completely free of charge. Water fees, therefore, do not reflect actual costs, resulting in overconsumption and lack of conservation incentives.77

Table 5: Hong Kong Water Tariffs78 Domestic Rate for a 4-Month Period Non-Domestic Rates Tier Consumption Price Price Purpose Price Price Block (m³/4 months) (HK$) (US$) (HK$/m³) (US$/m³) 1st 0-12 Free Free Trade 4.58 0.59 2nd 13-43 4.16 0.53 Construction 7.11 0.91

3rd 43-62 6.45 0.83 Non-Local 10.93 1.4 Vessels 4th 62+ 9.05 1.16 Local Vessels 4.58 0.59

Singapore Pricing water Singapore has embarked on economic water-conservation efforts at its true cost and priced water to reflect its true cost.79 This is considered to encourages 80 conservation be the best policy to prevent wastage. Table 6 summarises Singapore’s water tariff structure.

Table 6: Singapore Water Tariffs81 Tariff Consumption Tariff Tariff Water Category Block (m³/month) (S$/m³) (US$/m³) Conservation Tax (per cent of tariff) Domestic 0-401.17 0.92 30 40+1.4 1.1 45 Non-Domestic All units 1.17 0.92 30 Shipping All units 1.92 1.5 30

24 Singapore Singapore began increasing the price of water in 1973 when it was introduced a experiencing growing consumption despite efforts to encourage conservation tax and conservation. By raising tariffs, the city witnessed a decrease in progressively consumption for the first time since 1967. A conservation tax was raised domestic imposed in 1991 to further discourage wastage82. Domestic tariffs tariffs were again raised between 1997 and 2000, so that domestic and non-domestic users were charged the same for the first 40 m3 of consumption. Over this amount, domestic users are charged substantially more, so that bills increase incrementally with consumption.83

Pricing water Water in Singapore is currently priced at the cost of producing at the cost of desalinated water. This funds the energy-intensive cost of desalination desalination as well as research into new water technologies.84 A Sanitary Appliance fee and a Waterborne fee are levied to offset the expense of treating grey water and the operation and maintenance of Singapore’s public sewage system.85

Raising tariffs Singapore’s national water agency (PUB) was able to raise water publically tariffs without provoking public outrage. This was possible acceptable due because of the numerous awareness and conservation campaigns to conservation campaigns aimed at informing the public about the value of water. The current tariff system was also introduced progressively to avoid drastic change and confusion.86

World Cities’ Water Tariff Comparison In general, the Comparing cities of a similar nature makes it clear that Hong higher the GDP, Kong’s water tariffs are indeed very low, especially when taking the higher the water tariffs, GDP into account. The wealthier the city, in general, the higher but not for the water tariffs. However, Hong Kong is an exception87 (Chart 5). Hong Kong

25 Chart 5: A Comparison of Water Charges & Per Capita GDP in Hong Kong and Singapore with Other Major Cities88 (Based on Annual Consumption of 100m3 per account)

Per capita GDP 2012 Total Drinking Water Charges 2011 (US$) (US$/100m³/year) 63,238 New York 238 62,523 Singapore 117 58,264 Macau 54 53,881 Paris 159 51,978 London 225 48,672 Hong Kong 34 42,534 Taipei 41 41,446 Tokyo 194 32,155 Seoul 44 28,007 Shenzhen 30 21,364 Shanghai 26 20,275 Beijing 47

2.4 Water Agreements and Water Relations

2.4.1 Water Supply Agreements In both cities, Water importation has been fundamental to the rapid water imports development of both cities and, to different degrees, remains are regulated by agreements critical to their foreseeable future. These water purchases are signed under regulated by water supply agreements. Both cities’ agreements colonial rule were negotiated under colonial British rule and have subsequently survived administration changes.

2.4.2 The Guangdong-Hong Kong Water Supply Agreement The DongShen Project The DongShen The DongShen Project is core to the five Guangdong-Hong Kong Project is Water Agreements signed between 1960 and 1998 (Table 7). The beneficial to both Hong Mainland official media often describes the project as a “lifeline Kong and for Hong Kong”. However, generally speaking, the DongShen Mainland China Project is a two-way deal between Hong Kong and Mainland China, with benefits for both sides.

26 Table 7: Guangdong-Hong Kong Water Agreements89 Year Agreement Amount Year (mcm) Effective 1960 1st 23 1960 1964 2nd 68 1965 84 1972 109 1976 1978 3rd 145 1978 182 1982 1980 supplementary 220 1982 1987 4th Progressive increase from 1989 to 1995 reaching 660 mcm. 1989 5th Increase after 1995 with an annual increase of 30 mcm to 770 mcm in 1998 and reaching 840 mcm in 2000. Eventually up to a max. of 1,100 mcm/yr. 1998 Loan Interest-free loan of HK$2,364 million Agreement (US$304 million) from Hong Kong to Guangdong to construct a closed aqueduct to improve water quality. Reduced annual increase of water from 30 mcm to 10 mcm from 1998 to 2004.

a) DongShen: Early years 1st DongShen A fundamental part of the DongShen Project, the Shenzhen agreement Reservoir was built in the late 1950s under the “CCP Central signed in 1960 Committee’s Instructions Regarding Waterworks” during China’s was a “by- product” of the Great Leap Forward. After the facility was completed in 1960, “Great Leap the Bao’an County Government (寶安縣政府) and the Hong Kong Forward” colonial authorities saw the potential of the facility in solving Hong Kong’s water problems and the two parties started discussions. The first DongShen Agreement was signed in 1960, under which Hong Kong would be supplied with 5 billion gallons a year at RMB 0.10 per gallon. In 1961, the reservoir officially started supplying Hong Kong with water, but it was stopped in 1962-63 due to a severe drought90. In 1964, the reservoir was connected to the Dongjiang River via pipelines, which formally began supplying Hong Kong with Dongjiang water on 1 March 1965. This allowed Hong Kong to buy 68 mcm of water from Guangdong Province annually.91 Since then, Hong Kong and Guangdong have entered into a series of agreements securing a continuous and stable water supply.

27 b) The DongShen Project and the Chinese Communist Party’s Core Interests The Chinese The DongShen Project is not only a final solution to Hong Kong’s Government water shortage dilemma, it is also a crucial part of China’s funded and constructed economy and trade, foreign relations strategy, and overall the Project as national strategy. The Hong Kong colonial authorities approached it fulfilled their Guangdong to investigate the possibility of diverting Dongjiang “Eight-Words water to Hong Kong, in order to solve the long-term fresh Policy” towards Hong Kong water shortage problem. The Chinese Government responded proactively because it served their “Eight Words Policy”. After its own study, the Chinese Government decided to design, construct and finance the DongShen Project. Premier Zhou Enlai instructed China’s State Planning Commission to draw funds out of the foreign aid budget to pay for the project.92

The DongShen Throughout several decades, while China experienced a Project multitude of extreme challenges93, the DongShen Project not only brought China important ameliorated Hong Kong’s water shortage dilemma, it also brought supplies and China much needed food, equipment, foreign exchange, and ensured Hong foreign relations. Moreover, the DongShen Project fundamentally Kong’s value to safeguarded Hong Kong’s position as East Asia’s center of trade China and Hong Kong’s value with respect to China’s economy, trade, foreign relations strategy and national strategy.94

c) DongShen and Development of Shenzhen and the Pearl River Delta The DongShen The DongShen Project has been vital to the development of the Project is Shenzhen Special Economic Zone (SSEZ), which was established vital to the in 1980, and the PRD. When its second expansion phase began development of SSEZ and the in the 1980s, the project began supplying water to SSEZ. The PRD third expansion, completed in 1996, increased supplies to cover Dongguan and part of Guangzhou in addition to the quantity provided to Hong Kong.95

DongShen The DongShen Renovation Project, completed in 2003, achieved project is crucial the separation of clean water and wastewater and improved the to China’s quality of supply. It “safeguarded the water security of Hong Kong, economic and national Shenzhen, and Dongguan, a region then possessing 20 million interests people and a total production output value of RMB 1.9 trillion”. Of the river’s total annual supply of 2,423 mcm, two-thirds is consumed in Guangdong.96

The DongShen Project not only safeguards the prosperity and stability of Hong Kong, it is also the foundation of development

28 for the SSEZ and the PRD. Additionally, it is a crucial part of Mainland China’s economy and national interest.97

The 1989 Agreement In 1989, Hong Kong signed a long-term water supply agreement with Guangdong Province, and an additional long-term agreement was signed in 1998. These Agreements are reviewed periodically to determine water quantity and price.98

a) “Turnkey Purchase” The 1989 Agreement is still in effect and has survived the reunification and countless rounds of negotiations on water quantity, quality and price. It adopted a “turnkey purchase” principle in 2006, which fixed the yearly amount and price of water supplied to Hong Kong. However, the monthly supply can be adjusted in accordance with local reservoir and rainfall conditions.99

From 2012 to The Agreement is reviewed between the HKSAR Government’s 2014, Hong Water Supplies Department (WSD) and the Guangdong Provincial Kong needs to pay about 5per Government periodically. Under the latest review, Hong Kong is cent more per entitled up to 820 mcm of water per annum,100 and paid HK$35 annum for the billion (US$455 million) in 2012, which increased in 2013 to HK$37 same amount billion (US$481 million) and the HKSAR Government will pay of water HK$40 billion (US$509 million) in 2014.

Guangdong On their side, Guangdong is responsible for ensuring that needs to ensure the quality of Dongjiang water meets the latest national the quality of 101 the raw water standards . However, water reaching Hong Kong will undergo quality it sells additional treatment102, which adds further costs for the HKSAR to Hong Kong Government.103 The Agreement is due for review in 2014.104

b) The Future Outlook Over the years, the quantity of water agreed to be supplied to Hong Kong has increased as well as the cost. The 1989 Agreement, and the continous reviews are supposed to guarantee an eventual total of 1,100 mcm per annum, enough to ensure Hong Kong’s long-term water needs until 2030.105

The five cities However, the other five cities/city prefectures in the Dongjiang are subjects to Basin have already exceeded their water allocations and are tightened water being further restricted by the Central Government’s tightening control but not Hong Kong controls on water policy. Therefore, it is unlikely that Hong Kong’s allotment under the Agreement will remain untouched.106

29 2.4.3 The Singapore-Malaysia Water Supply Agreements Singapore and Table 8 provides an overview of the complicated water Malaysia’s water agreements between Singapore and Malaysia. The water trade trade is not one way and they between the two countries is not one-way. A substantial amount dispute over the of water Singapore purchases from Malaysia is sold back in a water prices treated form at a much higher price, and thus, has become the main trigger of a decade-long dispute between the two countries.

Table 8: Singapore-Malaysia Water Supply Agreements107 Years Agreement Amount of Raw Water Amount of Effective to Supply Singapore Treated Water (RM/ (US$/ 4.55m³) m³) (mcm) Sold to Johor (m³) 1927- 1st Singapore could rent 3637, but could 0.25 0.08 1961 2,100 acres of land increase to from Johor at S$0.3/ 5,455 in 1929 acre/yr. The water itself was free. 1961- 2nd Singapore rented land Entitled to 12 0.5 0.17 2011 to draw water from per cent of the at S$5/acre/yr and raw water, with a S$0.3 for every 3.8 m3 minimum supply of water it withdrew. of 18,184. Could Prices could be request more if reviewed in 1986. required. 1962- 3rd Singapore could draw Entitled to 2 per 0.5 0.17 2061 up to 1.14 mcm/day cent of the raw from the Johor river. water. Purchase price of raw water remained unchanged. Had to pay rent for the land it used. Prices could be reviewed in 1987. 1990- Supple- Singapore allowed 2061 mentary to construct a dam to facilitate water extraction, Johor set aside 21,600 ha of land for this purpose. Singapore paid RM 320 million in compensation plus RM 18,000/ha and annual rent of RM30/1,000 cubic ft3. Singapore could buy additional raw water from the dam.

30 The Expired Agreements Singapore The water challenges faced by Singapore have resulted in it has signed 4 entering into four agreements with Malaysia, the first of which agreements was in 1927. This Agreement allowed Singapore to rent land from with Malaysia and two of Johor, from which to draw water, and to sell treated water back them have to Johor. Singapore had to pay rent for the land, but the water already expired it withdrew was free. The next agreement was signed between the City Council of the State of Singapore and the Government of the State of Johor in 1961. This superseded the 1927 Agreement. Under the 1961 Agreement, Singapore gained full and exclusive rights to draw water from certain land in Johor. Singapore had to pay rent for the land and was charged for the water it withdrew. Singapore also agreed to sell Johor a daily supply of treated water; this agreement expired in 2011 and was not renewed.108

The Existing Agreements Singapore Currently in effect are the 1962 and 1990 Agreements. The 1962 pays much less Agreement has given Singapore full and exclusive rights to draw to buy from a maximum of 250 million gallons (1.14 mcm) of water from the Malaysia than Hong Kong Johor River. Of this water, Johor is entitled to a supply of up to 2 does from per cent of the treated water produced. Singapore pays rent for China the land as well as RM 0.03 (US$0.01) per 1,000 gallons (4.55 m3) of raw water and Johor pays RM 0.5 (US$0.17) per 1,000 gallons of treated water it buys back. The price for the raw and treated water under the agreement was to be reviewed in 1986 and 1987, but both sides chose to maintain the original prices.109

The 1962 In 1965, Singapore separated from Malaysia to become an Agreement was independent city-state. With few natural resources of its own, constitutionally water supply was seen as vital to the new state’s national guaranteed by Malaysia until security and, therefore, Singapore insisted that the 1962 Water 2061 Supply Agreement was constitutionally enshrined in the 1965 Independence of Singapore Agreement (the Separation Agreement). This was seen to be a great achievement for the then Singaporean leaders as Singapore’s water supply was thus assured until 2061.110

The 1962 Agreement is supplemented by the 1990 Agreement between Singapore’s PUB and the Johor State Government. The two governments signed a separate document to pledge adherence to this agreement, which was required due to the separation of the countries.111

31 The 1990 The 1990 Agreement allowed Singapore to construct a dam Agreement in Johor to facilitate water extraction from the Johor River. allowed Singapore to Singapore agreed to pay compensation for the permanent loss of buy additional the land, as well as rent. Singapore also had to bear the cost of water from building and maintaining the reservoir. This enabled Singapore to Johor buy treated water from the reservoir in addition to the raw water it was entitled to withdraw under the 1962 Agreement.112

The Future Outlook The existing Agreements are constitutionally-binding and, therefore, guarantee Singapore’s long-term water supply until 2061. Singapore is currently reliant on Johor for approximately 40 per cent of its water supply.

2.5 Managing Disputes

2.5.1 Water in the Regions Prone to Water Dispute Disputes Water is a particularly sensitive issue due to its importance to could arise as all aspects of life and the economy. When resources have to be the PRD and shared, tensions can easily escalate and disputes arise. Both cases Johor both suffer water under discussion could be particularly volatile as both sourcing shortages areas, the PRD region in China and Johor in Malaysia, are prone to shortages.

Hong Kong can Hong Kong is seen to be in a privileged position under the DJ be viewed as Allocation Plan, because its allocation is not restricted during privileged as periods of drought. Upstream regions, such as Heyuan and its allocation is unaffected Huizhou, have had their development constrained in order to help when others limit degradation of the quality of the river’s water,113 while Hong need to adopt Kong prospered from a stable supply. This can lead to resentment changes and a belief amongst neighbours that Hong Kong is being unfairly prioritised.

Johor imposed Similarly, several Malaysian states suffer from chronic shortages, water rationing which make the water issue with Singapore a particularly while supply to Singapore emotional one. In March 1990, the northern parts of Johor had continued, to impose rationing while water from their reservoirs flowed to leading to Singapore. The Johor Government was heavily criticised for this resentment as some perceived that Singapore’s needs were being put before those of the locals.114

32 2.5.2 Hong Kong – Guangdong Water Disputes Role of Water in Sino-British Negotiation As China The water issue emerged during the Sino-British negotiations. At controlled Hong the time, Hong Kong relied on Mainland China for at least 70 per Kong’s water, cent of its fresh drinking water, and 99 per cent of its local water Britain had to accept Chinese reservoir capacity was located on the leased land of the New demands during Territories, a lease from Mainland China that was set to expire Handover in 1997. Giving in to Chinese demands seemed to be the only negotiations plausible option.115

Quantity and Quality Issues in the 1990s Difficulties in From the mid-1990s there have been disagreements between renegotiates Hong Kong and Mainland China over the quantity and quality of resulted in potable water Dongjiang water. Hong Kong found it difficult to renegotiate the being dumped supply contract in the 1990s, which provided for an inflexible into the sea amount of water.116 As a result, a large amount of potable water was dumped into the sea and the government came under severe criticism for wasting money and resources.117

Dongjiang’s Moreover, under the 1989 Water Supply Agreement and the 1998 raw water Loan Agreement, the quality of Dongjiang water that Hong Kong quality fell purchases should not fall below the Mainland’s 1983 National below the agreed Standard for Surface Water. However, from 1989 to 1999 the standard and quality fell below the standard and this meant that the water had to be purchased had to be further treated at Hong Kong’s expense. treated at Hong Hong Kong, therefore, had to spend an additional capital cost Kong’s expense of HK$35 million (US$4.5 million) and HK$104 million (US$13.4 million) on recurrent treatment costs during this period. Under the Agreements, there are no penalties or compensation provisions for non-compliance with the Agreements’ terms.118

Future Competition and Water Tensions Competition Competition for water in the PRD region will, inevitably, intensify. for water in The total resource available to the five Mainland cities has the PRD will increase decreased, and all five cities sharing the river have already approached or exceeded their allotments of Dongjiang water119.

Manufacturing The Pearl River Delta Region Reform and Development Plan plans in the Outlines for 2008-2020 and its follow-up implementation PRD will further push the document created by the National Development and Reform region’s water Commission, the Five Integration Plans for the Pearl River Delta capacity (2009-2020)120, comprise the development blueprint for the PRD.

33 Under the new integration plans, the PRD will become home to a series of new “world-class” industrial bases, but the focus will continue to be on manufacturing. Ever-increasing water demand in this region is a near certainty. It will push the PRD’s already stretched capacity beyond its limits121.

Hong Kong’s In recent years, Hong Kong’s comprehensive competitiveness has bargaining decreased.122 With the PRD’s continued integrated development, power on the Hong Kong’s leverage as an independent economic entity will water issue is declining inevitably shrink, and its bargaining power on the issue of water resources will shrink with it.

The Possibility of a Carrot-And-Stick Approach Mainland Since reunification, some Mainland Chinese officials have officials have frequently expressed the view that Hong Kong’s water supply advocated should be cut off whenever Hong Kong shows any sign of anti- using water 123 as a means Beijing sentiment. This includes incidents in which Hong of controlling Kong people identify themselves as being ‘Hong Kong citizens’ Hong Kong rather than ‘Chinese citizens’ or protest against reforms such as compulsory national education, or wave old colonial flags.

These sentiments demonstrate a mind-set within the Mainland authorities that they are not above using the water issue as a means to keep Hong Kong in check. Although the Central Government has never officially expressed such an intention, there is the possibility that this could evolve into a carrot-and- stick method of control.

2.5.3 Singapore-Malaysian Water Disputes One’s Vulnerability, Another’s Advantage Singapore- Despite having a long and interlinked history, as well as four water Malaysian supply agreements, Singapore and Malaysia are cordial at best. Since relations are cordial at best separation in 1965 there have been recurring disputes between the two over ethno-religious issues and policy decisions. The relationship between the two has even been described by analysts as “the most sensitive and unstable relationship between any pair of Association of Southeast Asian Nations (ASEAN) members”.124

Malaysia has Issues over water stem back to Singapore’s split from Malaysia, exploited when the then Prime Minister of Malaysia stated that if Singapore’s Singapore’s foreign policy was detrimental to Malaysia’s foreign water dependency to policy interests they could always use the threat of turning off its advantage Singapore’s water supply to bring pressure on them. The issue

34 has been raised periodically by subsequent Malaysian authorities to convey their displeasure with Singapore’s policies, to influence government decisions or for domestic political purposes.125 Malaysia, therefore, has a clear history of exploiting Singapore’s water dependency for political advantage.

Singapore’s clear vulnerability in this area has seen the city-state looking to reduce its dependence. In the 1970s, the then Minister of Finance stated that Singapore should develop its local water supply so that it could be “dependent as little as possible on outside supplies”126. Furthermore, the extent of its vulnerability was harshly exposed during the Second World War when the Japanese bombed the water pipes supplying Singapore from Malaysia, leaving the island exposed127.

Indonesia Adding to Singapore’s sense of water insecurity is that, in 2000, will not be a the Indonesian President stated that Singapore’s water supplies viable water 128 alternative for could easily be cut off by a “Malaysian-Indonesian alliance” . Singapore This worried Singaporeans as they had looked to Indonesia as an alternative source and signed a water agreement with them in 1991. Progress on building the necessary supply and distribution network was slow due to Indonesia’s political climate, but Indonesia did at one point become a more viable alternative. Discussions to buy water from Indonesia resurfaced again in 1999 and Indonesia appeared more amenable to the idea. However, no concrete progress has so far been made. Given its history with Indonesia and experience with Malaysia, Singapore remains concerned that Indonesia is as willing as Malaysia to use water as a political tool129.

“Price War” The latest The latest disagreement between Singapore and Malaysia dispute is over focuses on the price of raw water and the price that it sells this the price of raw water, once treated, back to Johor. Under the 1962 Agreement, and treated water Singapore is able to buy raw water from Johor for just RM 0.03 (US$0.01)/1,000 gallons, i.e, about US$0.002/m3, a price seen by Malaysia to be ridiculously cheap130.

The dispute The price dispute began in 2000, when the two governments began in 2000 began negotiations on five key bilateral issues. These negotiations during package 131 negotiations included discussions on a new 100-year water agreement , which including a new aimed at continuing supply to Singapore after 2061. They appeared 100-year water to make a breakthrough with talks in 2001 resulting in a broad agreement agreement being reached on solving these issues as a package132.

35 Malaysia wants However, negotiations stalled as they were unable to agree to increase on price. Malaysia wanted to increase the price to eventually the price and 133 is unwilling to meet the amount Hong Kong pays for Guangdong water . increase supply Malaysian authorities believe that Singapore is profiting from the significantly agreement134. Another sticking point was the fact that Malaysia was unwilling to commit to a demand for a significant increased in supply as their own water future is uncertain135.

The dispute In 2002, Malaysia unilaterally decided to decouple water from escalated the other issues that were part of the package agreement. This further, talks resulted in Singapore concluding that any principle benefits that stalled had been tied to the package negotiation were no longer valid. The dispute between the two countries now included whether Malaysia had the right to review the price of water, as under the previous 1961 and 1962 Agreements the right of review was to be brought up in 1986 and 1987 respectively. Furthermore, Malaysia decided that it wanted to backdate the revision of the price to 1986 and 1987. However, Singapore would only agree to negotiate on a revision if Malaysia agreed to continue their supply for 100 years after 2061. These issues and the failure to secure an increase in price caused Malaysia to halt talks in 2002136.

The Separation An added complication to the price dispute is that Singaporean Agreement authorities claimed to be concerned that their independence guarantees the Water from Malaysia could come into question. The water agreements Agreement so were considered to be so important that they were confirmed any revision and guaranteed by the governments of Singapore and Malaysia on water in the Separation Agreement. Under the 1962 Water Agreement, could question Singapore’s the price of water purchased could only be revised in 1986 and validity 1987, and Singapore is concerned that breaching this will call into question the validity of the Separation Agreement, and therefore, Singapore’s very existence137.

Massive National Media Campaigns Disagreement This disagreement has led to extensive media campaigns by both has led to governments. Singapore published a book titled Water talks? If extensive 138 media only it could , in which it accused Malaysia of being unreasonable, campaigns by constantly stalling and changing its position on the issue. Malaysia both sides retaliated with its own booklet Water: the Singapore-Malaysia Dispute: the Facts139, which was sold for the symbolically low price of RM 0.03. Malaysia also published a series of advertisements in regional and national newspapers which depicted Singapore as

36 wealthy but stingy and insecure due to its refusal to pay more to the kind and generous Malays140.

Malaysia Malaysia believes that it is losing money by selling raw water to believes that Singapore so cheaply. Furthermore, maintains that, based on joint Singapore is actually 60- meter reading, Singapore is actually 60-70 per cent dependent on 70 per cent water from Johor, not about 50 per cent as claimed by Singapore. dependent on Malaysia authorities maintain that, in 2000, Singapore sourced Johor’s water 66 per cent of its water from Johor, and in 2001, 72 per cent. This reiterated the Malaysian perception that it has been exceedingly generous to Singapore and that it is striving for a fairer price for all141. If this is indeed the case, Singapore’s current water plan could face a serious flaw.

Singapore Conversely, Singapore argues that, as it sells treated water back to argues that Johor at a subsidised rate, any losses Malaysia may incur from selling Malaysian raw water at such a low cost are more than covered142. Under the losses are offset as it sells 1962 Agreement, Johor is entitled to buy 2 per cent of the treated treated water water Singapore produces from the raw water it buys from Johor, at a subsidised which equates to about 15 million gallons/day (0.068 mcm/day). rate However, Johor purchases significantly more than this – roughly 37 million gallons/day (0.168 mcm/day). The Malaysian Government attempted to wean itself off this source and in 1995 instructed Johor to cut down. However, this would result in a dramatic increase in Johor’s water tariffs and could provoke public protest. Since 2001, Johor has had to raise its tariffs by up to 40 per cent in an attempt to reduce its reliance on treated water from Singapore143.

Not Over Yet… Malaysia Malaysia says that Singapore needs to pay a higher “reasonable will fulfil the and fair” price for the raw water, which Singapore claims it would constitutional have done, it just will not pay a price that has been arbitrarily set requirement 144 but demands by Malaysia . Malaysia has stated several times that it will not a “reasonable default on the 1962 Water Agreement but, once it expires, plans price” to sell treated, instead of raw, water to Singapore145.

Singapore is Besides price, Malaysia is concerned about its own water security, unlikely to especially given that some of its states already suffer shortages. buy Malaysia’s water after This makes it unwilling to commit to supplying a fixed amount 2061 if the to Singapore over a long period of time. Even assuming an water talks agreement on price could be reached, the possibilty of a new 100- remains the year water supply agreement remains highly unlikely146. status of quo

37 3 Current Water Policies

After half a century of dealing with water rationing, administration changes, and disputes over water, both cities have arrived at various initiatives that aim to overcome shortages and maintain stable water supplies to support their growing populations. The initiatives, in general, are designed to improve resource management and increase supply.

3.1 Policy Bureaux Overseeing Water Resources Management

Hong Kong Hong Kong and Singapore differ completely in this regard. Water has numerous resources in Hong Kong are managed by a structure stretched policy bureaux managing its across numerous policy bureaux (Chart 6). Seperate bureaux are water responsible for collection, distribution and effluent discharge. Unlike Singapore, Hong Kong does not have a cross-sectoral mechanism in policy making to close the loop between various government agencies.

Chart 6: Water policy-Related Departments in the HKSAR Government Structure147 Chief Executive Chief Secretary for Administration Financial Secretary

Food and Health Environment Bureau Bureau Development Bureau

Environmental Food & Environmental Water Supplies Protection Department Hygiene Department Department Agriculture, Fisheries & Conservation Drainage Services Department Department Buildings Department

Planning Department

Electrical & Mechanical Services Department

38 Singapore has Singapore has integrated all water-related government one national departments into one policy unit – The Public Utilities Board (PUB), water agency (PUB) which is a statutory board under the Ministry of Environment and Water Resources (MEWR). PUB is the national agency managing Singapore’s water supply, catchment and discharge in an integrated way.148

Chart 7: Water Policy-Related Departments in the Singaporean Government Structure149

Prime Minister

Ministry of the Environment and 15 Other Water Resources Ministries (MEWR)

Public Utilities Board (PUB) National Environment (The National Water Agency) Agency (NEA)

3.2 Policy Framework

3.2.1 Hong Kong’s Total Water Management Strategy Voluntary-based, Overall, Hong Kong’s water policies are more descriptive, lacking clearly lacking clearly defined targets and so are implementated on a defined targets predominately voluntary basis.

Hong Kong’s water policy for 2008 to 2030 is expressed in a Total Water Management (TWM) strategy, which aims to improve Containing demand conservation and to protect resources. The HKSAR Government growth through recognised that the TWM strategy is made necessary by the conservation uncertain impacts of climate change and the need to be a good neighbour to other municipalities facing water shortages in the PRD.150

The HKSAR Government works to conserve and protect Hong Kong’s water resources through a combination of demand and supply management initatives, which are outlined in Table 9.

39 Table 9: Hong Kong’s Water Policy151 Total Water Management Policy Initiative Action Water Demand Enhance public education on water Management conservation. Promote use of water saving devices. Enhance water leakage control through the programme to replace and rehabilitate aged water mains, and application of new technology to improve pressure management and detection of leakage. Target: Reduce leakage rate to 15 per cent in 2015. Extend use of seawater for toilet flushing. Target: Plans to extend seawater supply coverage to 85per cent of the population, when ‘financially justifiable’ Water Supply Strengthen protection of water resources. Management Actively consider water reclamation (including reuse of grey water and rainwater harvesting). Develop the option of seawater desalination Target: Develop desalination to supply 5-10per cent of Hong Kong’s total water demand. Investigative studies of the plant to be completed in 2014.

Future Targets No imminent When designing the 2008 TWM strategy, the HKSAR Government need for new foresaw no imminent need for new water sources, and the water sources. expansion of gathering grounds and reservoir storage was given a low priority. Land scarcity, high costs and the possible negative environmental impacts might be reasons for such responses.

Desalination The HKSAR Government concluded that water reclamation and as a viable desalination by Reverse Osmosis (RO) were the most viable alternative options. It has also announced that a new desalination plant could be opened as early as 2020, which will provide another local resource to meet Hong Kong’s future demand152 (Chart 8 and Chart 9).

40 Chart 8: Hong Kong’s Water Resources (2012)153

22% 19%

Local catchment Dongjiang 59% Seawater

Chart 9: Hong Kong’s Future Water Resources (2020)154

4% 18% 22% Local catchment Dongjiang Seawater 56% Desalination

3.2.2 Singapore’s Four National Taps Singapore’s water policy currently consists of ‘Four National Taps’ and a 3P Approach, which are run by the PUB.

The ‘Four National Taps’ refer to local catchments, imported water, reclaimed NEWater and desalinated water (Table 10).

Table 10: Singapore’s Current Water Policies155 Four National Taps Tap Water Source Current Target Percentage (per Percentage (per cent) cent) 1st Local Catchments 30 20 2nd Imported Water 40 0 3rd Reclaimed Water 20 55 (NEWater) 4th Desalinated Water 10 25

41 Increasing local Under this strategy, the Singaporean Government plans to catchment utilise 90 per cent of its land for water catchment and increase capacity, NEWater and NEWater and desalination to supply 55 per cent and 25 per desalination cent of Singapore’s total needs respectively. The government production to is proactively looking to reduce its reliance on imports by reduce imports diversifying sources and if necessary become self-sufficient by the time the 1962 Agreement expires in 2061.156

The 3P (People, Public and Private) Approach is Singapore’s way of encouraging and engaging everyone to take ownership of the city’s water resources management (Appendix 3).

Future Targets Preparing to Singapore’s Four National Taps could be reduced to three in meet all water the future if it becomes necessary to stop importing raw water needs locally from Malaysia. While the Singaporean authorities express their gratitude and acknowledge the need for Johor water, they are preparing to meet all their water needs locally by 2061 (Chart 10 and Chart 11).

Chart 10: Singapore’s Current Water Resources (2012)157

30% Local catchment 40% Imported water NEWater 10% 20% Desalinated water

Chart 11: Singapore’s Future Water Resources (2061)158

20%

55% Local catchment 25% NEWater Desalinated water

42 3.3 Actions and Implementation

Under the TWM strategy and Four National Taps policy both cities are implementing similar measures but the extent of these measures differs dramatically.

3.3.1 Local Catchment Hong Kong has no current plans to increase its local catchment capacity. While Singapore plans to increase its catchment area from 67per cent of its land area to 90per cent by 2060.

3.3.2 Water Imports Hong Kong Hong Kong Hong Kong officials see imported water as the most economical relies heavily source of water. Consequently, there is no plan in Hong Kong to on imported reduce reliance. Currently, 70-80 per cent of Hong Kong’s total water and still considers it as water demand is met by this water, and officials predict that the most viable this proportion will remain unchanged in the next five years.159 solution Moreover, officials believe that Hong Kong will finally require its full allocation of 1,100 mcm by 2030160.

Hong Kong pays In 2012, the HKSAR Government paid HK$35 billion (US$454.9 320 times of million) for an actual supply of 709 mcm161. In other words, Hong what Singapore 3 pays for Kong pays approximately US$0.64/m , while Singapore pays imported water US$0.002/m3. (US$0.64/m³vs. US$0.002/m³) Singapore Importing water from Malaysia is very economically favourable for Singapore, especially when compared to the cost of desalination, which is RM 7.42 (US$2.47) per 1,000 gallons162. However, the 1961 Agreement expired in 2011, and Singapore is preparing to let the 1962 Agreement expire if water talks between Singapore and Malaysia do not make progress.

Singapore It must be noted that there are data discrepancies on the amount has halved its of imported water, as discussed in section 2.5.3. Nonetheless, it water imports seems Singapore is well on the way to reducing dependence. For since its Independence instance, at the time Singapore gained political independence, 80 per cent of its water was sourced from Malaysia, but now it has been reduced to around 40 per cent, despite a doubling in population size163.

43 3.3.3 Water Reclamation Water reclamation, or water recycling, is when domestic, municipal or industrial wastewater is chemically and/or biologically treated for reuse164. The level to which it is treated depends on the intended use, it is possible to treat wastewater to a potable standard, but the concept of drinking treated wastewater is not yet accepted by the public globally. The most common end use is for toilet flushing or irrigation.165

Hong Kong Limited use of The HKSAR Government has introduced water reclamation reclaimed water projects at its Ngong Ping and Sha Tin Sewage Treatment Works, and equipped 13 other plants with such facilities.166 Reclaimed water from these treatment plants is currently used within the facilities for irrigation and water reclaimed from the Ngong Ping Works is used to flush a nearby public toilet167.

These projects have demonstrated that reclaimed water for non-potable use is technically feasible in Hong Kong168. Using reclaimed water for toilet flushing appears to be the most publicly acceptable and viable use. However, most of Hong Kong already uses seawater for flushing, so reclaimed water would only be considered in places where seawater is unavailable.

Reclaiming The HKSAR Government estimates that it would cost HK$9.8/m3 water to a (US$1.26/m3)169 to treat secondary effluent with a high saline non-potable standard costs content (e.g. seawater wastewater) to a non-potable standard, HK$9.8/m3 but whereas, desalination would cost approximately HK$12/m3 usage is limited (US$1.54/m3)170. The cost of treating this non-potable reclaimed water to a potable standard has not been investigated, therefore, the potential of reclaimed water as a viable alternative to energy intensive desalination remains unclear.

Singapore Singapore is dramatically increasing its water reclamation.

a) Pioneering NEWater is Singapore has a long history in water reclamation. It began ultra-clean experimenting with the process in 1966 and it was seriously reclaimed considered in the city’s 1972 Water Master Plan. In 2000, it built water its first demonstration plant. It has since found that the water produced is potable and has worked on further improving the technology to provide a reliable source.171 This progress led to

44 the development of NEWater, which is produced by RO and ultra-violet disinfection,172 and results in ultra-clean water that surpasses World Health Organization (WHO) standards173.

Membrane Singapore has discovered that using membranes to treat technology is wastewater is more energy-efficient and, therefore, more more energy economical than desalination. Desalinating water requires efficient approximately 3.5kWh/m3 174 of desalted water, while NEWater only requires 0.7-0.9kWh to produce the same amount of potable water175.

b) Applications NEWater is NEWater was named Singapore’s Third National Tap in 2003176 and mainly used is currently used primarily in industry and commercial buildings. in electronics This frees up a large amount of potable water for other uses. manufacturing and commercial Ultra-clean NEWater lends itself particularly well to electronics buildings manufacturing, which requires a comparatively large volume of clean water to make components177. Though PUB initally had to convince these industries to use NEWater, the majority of Singapore’s electronics manufactures are now on board. The use of NEWater has translated into direct economic gain for many companies as its high level of purity means that manufacturers can cut out internal water purification processes. One company estimates that using NEWater has saved it over US$500,000.178

c) Breaking Psychological Resistance A small amount PUB has also blended a small amount of NEWater with of NEWater Singapore’s reservoir waters for public consumption (accounting is blended in for approximately 2.5 per cent of daily water consumption)179. Singapore’s reservoirs Comparatively, officials from Queensland through to San Diego have been unable to convince the public to drink reclaimed wastewater. Singapore has achieved public acceptance through extensive public awareness campaigns to combat the ‘yuck’ factor associated with drinking recycled wastewater. The Prime Minister drank a bottle of NEWater at a national festival, playing on the concept that nationalistic Singaporean’s should drink it180. Branding the substance as ‘NEWater’ emphasised its purity181.

NEWater is NEWater is considered key to Singapore’s water independence positioned strategy. Four NEWater plants supply 30 per cent of Singapore’s as the key to Singapore’s water needs, and there are plans for more. This will enable water Singapore to meet its aim of NEWater serving 55 per cent of the independence country’s water demand by 2060.182

45 d) Future Challenges: Capacity and Cost Capacity and Singapore faces challenges in recycling water. As is evident from cost could Tables 11 and 12, the amount of NEWater currently being utilised be the dual challenges for is only 35 per cent of the amount of NEWater that could be NEWater produced. This means that Singapore’s NEWater plants have not been operating at full capacity, that the water produced is not being used and is, therefore, wasted, a combination of these two reasons, or another reason altogether.

Table 11: NEWater Capacity 2011183 Plant Capacity (mcm/day) Bedok 0.082 Kranji 0.077 Ulu Pandan 0.145 Changi 0.227 Total 0.532

Table 12: Breakdown of NEWater Use 2011184 Use Amount (mcm/day) Water Fabrication 0.061 Manufacturing Industries (including 0.090 petrochemicals & electronics) Commercial Buildings 0.019 Other 0.014 Total 0.182

The reason The reason for NEWater being under-utilised is an issue yet to for under- be explored. It could be due to overcapacity, deliberate strategic utilisation positioning, lack of acceptance, or simply a calculation of economic of NEWater has yet to be validity (given the very cheap price of the still available Johor revealed water). Nonetheless, in order to reach the target of NEWater accounting for over half the city’s water supply in 2060, there needs to be an increase in the amount of water available for recycling and the water’s non-potable and potable uses185.

NEWater production produces brine, which is currently mixed with secondary effluent before being discharged into the sea. This brine represents a form of untapped water that Singapore is looking to utilise. PUB believes it can increase the amount of water recovered from the NEWater process to 95 per cent by using new technology. This would leave only 5 per cent of the volume as brine, reducing waste.186

46 3.3.4 Desalination Desalination is the process of removing salt from water to make it potable. Most desalination plants use RO technology, which is more energy-efficient than other methods but still requires a vast amount of energy and can be environmentally destructive.187

Hong Kong Plan to develop Hong Kong is currently developing a desalination plant at Tseung a desalination Kwan O, which is scheduled for completion in 2020. The plant will plant to supply operate using RO, but it is currently unclear where the required 5-9per cent of 188 Hong Kong’s energy will come from. The plant will have capacity to supply 5 water needs per cent of Hong Kong’s water requirements, producing 137,000 m3/day in its first phase. The capactiy could be further extended up to to 247,000 m3/day, accounting for 9 per cent, later on. This project was motivated by findings that, despite water savings and various other initiatives, Hong Kong will likely have a water deficiency after imports of 5 per cent by 2030.189 Desalination in Hong Kong is not being developed to reduce dependency on Guangdong water but rather to meet additional future demand.

Singapore Singapore opened its first RO desalination plant in 2005 , currently there are two plants in operation (Table 13).

Table 13: Singapore’s Desalination Capacity 2013190 Plant Capacity (mcm/day) Singspring 0.136 Tuaspring 0.319 Total 0.455

The current plant meets 10 per cent of Singapore’s needs and the Government plans to increase the proportion to 25 per cent by 2060191.

a) Desalination and Energy Intensity Desalination Desalination is the most costly source of water under the Four is the most National Taps policy due to its high-energy requirements. energy- Singapore is investing in more energy-efficient technologies to intensive and costly water reduce both economic and environmental costs. The amount of source energy required for desalination by RO is approximately 3.5kWh/m3 today. The Government is working with Siemens to develop an electrically-driven desalination process requiring

47 1.5kWh/m3,192 and with Keppel Seghers on harnessing waste heat for desalination193 through membrane distillation, which requires 1.0kWh/m3. In the long run, Singapore believes it can reduce the energy needed to 0.75kWh/m3,194 which is almost as low as the 0.7-0.9kWh/m3 energy requirement of Singapore’s reclaimed NEWater195.

b) By-Products and Its Environmental Costs Brine, a by- RO technology, which is used for both desalination and the product of production of NEWater in Singapore, produces brine as a NEWater and 196 Desalination, is waste product, which is environmentally harmful. The brine environmentally is discharged into the sea through a submerged outfall that is harmful placed, where it is hoped, to cause the least damage. Extensive environmental assessments have been undertaken197 and more environmentally-acceptable brine disposal methods are being researched198.

3.3.5 Seawater Use The two cities Seawater is used very differently in the two cities. Hong Kong use seawater in continues to develop and exploit its unique dual-water supply very different system to increase seawater use for non-potable purposes. ways Singapore, in contrast, concentrates on desalination in order to turn seawater into a potable resource, as discussed in 3.3.3.

a) Dual-Water Supply System - A Hong Kong Invention Hong Kong has managed to conserve water resources through the development of a sophisticated dual-system, which utilises seawater for toilet flushing. Currently, about 80 per cent of Hong Kong is supplied with seawater flushing and the WSD plans to increase the number of households served199 (Chart 12).

Seawater This use of seawater for toilet flushing translates to saving flushing is approximately 22 per cent of fresh water consumption200 or equivalents to 750,000m3 of potable water a day201. Seawater flushing has also saving about 22 per cent of been found by the International Water Association to be the most fresh water economic method of saving water resources in terms of capital investment, life-cycle, unit costs and energy consumption, when compared to desalination and wastewater reclamation202.

48 b) Leveraging the Seawater Flushing System SANI® Process The SANI process The SANI® Process – ‘Sulphate reduction, Autotrophic is a novel, denitrification and Nitrification Integrated’203 Process – is a novel, energy-efficient and low-carbon energy-efficient and low-carbon sewage treatment technology sewage/treat- invented by a research team at the Hong Kong University of ment technology Science and Technology (HKUST).

Development started in 2004 and was followed by a pilot test, jointly hosted by HKUST and the Drainage Services Department (DSD) of the HKSAR Government from 2007 to 2010. The tests effectively eliminated 90 per cent of sewage sludge production, reducing the treatment cost by 50 per cent and space requirement by over 50 per cent, as well as cutting greenhouse gas emissions by 35 per cent. A large-scale trial run of this process is being undertaken at one of the secondary wastewater treatment facilities in Hong Kong from 2013 to 2015. If this trial is successful, the technology will be considered for territory-wide application.204

Chart 12: Water Consumption Trend (1991-2011)205

(mcm) 1,400 Total annual cosumption 1,200 Fresh water consumption 1,000

800

600

400 Seawater consumption 200

0 year 2011 2010 1991 1997 1992 1993 1995 2001 2007 2002 1998 1996 1999 2003 1994 2005 2008 2009 2006 2004 2000

49 c) Triple Water Supply System – Seawater Application in the Hybrid Water Resource System TWS utilises The triple water supply system (TWS) is another Hong Kong seawater and innovation that saves fresh water by utilising seawater for toilet grey water to reduce fresh flushing (reducing the demand for fresh water in the complex by water use 20-50 per cent) and cooling with seawater (reducing electricity consumption by about 35 per cent), and reclaiming grey water. The system leverages seawater’s application beyond toilet flushing. Hong Kong International Airport is the world’s first organisation to put this triple water supply system into use.206

d) Challenges Ahead Saline However, seawater flushing has its drawbacks. The salinity of wastewater the resulting sewage limits its ability to be reused207 and makes costs more to recycling effluent relatively more expensive due to the need for treat more advanced treatment208. Therefore, this could restrict water reclamation to sewage treatment facilities in areas that are not supplied with seawater flushing, or for water to be reclaimed only to a non-potable standard.209 This may result in the HKSAR Government developing water reclamation in a very limited manner.

3.4 Further Water Saving Initiatives

Aside from seawater resources and water reclamation, several other initiatives have been implemented in order to expand water resources and conserve current supplies.

3.4.1 Technological Initiatives A variable- Singapore is working on a first-of-its-kind variable-salinity salinity plant plant, which integrates the NEWater treatment process with to integrate desalination to effectively treat both seawater and fresh water. NEWater and desalination The plant will help Singapore increase its water catchment area from 67 per cent to 90 per cent as it enhances the viability of using small streams and rivers as sources of water. Most of these sources suffer from seawater incursion and previously have not been viable sources. The technology is currently being fine- tuned in a medium-scale demonstration plant that has been in operation since 2007.210 The variable-salinity plant also has a lower production cost than desalination211, making it more economically viable.

50 3.4.2 Water Mains Leakage Hong Kong Lack of urban Hong Kong’s geographic features have resulted in the city planning developing vertically. Many old high-rise buildings are still resulted in functioning as domestic housing and commercial premises. Lack condensed infrastructure of urban planning and regulation in Hong Kong’s early days also and crowded contributed to condensed infrastructures and has resulted in water mains crowded underground facilities, such as water mains.

The age of Hong Kong’s water pipes creates problems for many residences in these buildings as it causes discolouration and, in some cases, contamination. The dominance of high-rise buildings also means that high pressure is required to pump water to the top of the buildings, therefore, making the water mains more prone to leakage.

Leakage rate In 2000, Hong Kong lost approximately 25 per cent of its water was 25per cent, to leakage from old pipes. This has led to the government is now 18per implementing a Repair and Rehabilitation programme under its cent, and will TWM strategy. The HKSAR Government aims to spend HK$19.2 be reduced to 15per cent by billion (US$0.25 billion) to repair and replace 3,000 km of aged 2015 water mains.212

So far this initiative has reduced the water mains leakage rate from 25 per cent in 2001 to 18 per cent in 2012 and the rate is predicted to be further reduced to 15 per cent in 2015 upon completion of the project.213

Singapore Leakage rate at While Hong Kong has made significant progress in this area, our 5per cent and leakage rate still pales in comparison to Singapore’s rate of less than is one of the 214 world’s lowest 5 per cent, one of the lowest in the world .

The tap water is Singapore achieved such a low leakage rate through a rigorous safe to drink leak detection and replacement programme215. Between 1983 and 1993, PUB spent roughly US$43 million on pipe replacement. Singapore also benefits from the integrated and controlled development of its urban area. By working closely with Singapore’s Housing Development Board, PUB has been able to develop a comprehensive system which ensures water that is safe to drink straight from the tap.216

51 3.4.3 Rainwater Harvesting Hong Kong Only in limited Rainwater harvesting is only in trial stages under Hong Kong’s trial stages TWM policy, and the HKSAR Government is encouraging private developers to adopt it as a form of water reclamation. It is questionable how successfully this can be implemented in Hong Kong due to the city’s compact nature, and the lack of integrated and forward-thinking development217. This makes capital investment requirements high.

Pilot schemes However, pilot schemes such as those being carried out at Hong show it is Kong Electric Company218 and at Tseung Kwan O MTR station219 possible and show that rainwater harvesting is possible in Hong Kong. Once a relatively cheap once a system system is implemented, rainwater is a relatively cheap source of is installed water. The HKSAR Government estimates that fresh water from rainwater would cost HK$4/m3 (US$0.5/m3) to produce, compared to the Dongjiang water’s HK$8.4/m3 (US$1.08/m3) in 2012.220

Singapore The ample Unlike Hong Kong with its dry winter, a large amount of rain rainfalls are falls fairly consistently year round in Singapore and little of this collectable on is wasted. Rather, rainwater is collected in streets, ponds, tall a large scale in Singapore buildings and bridges and taken in by streams and reservoirs to treatment plants. This makes Singapore one of the few countries that harvest urban storm-water runoff on a large scale for domestic supply.221 Singapore has, therefore, constantly and consistently stressed the need for cleanliness.

Cleanliness is, In 1965, the Singaporean Government declared that transforming therefore, a Singapore into one of the “cleanest cities in the world was high priority a national priority second only to defence and economic for the city 222 for collecting development” . Subsequent legislation has been developed in rainwater order to achieve this and has resulted in Singapore being able to collect a substantial amount of its rainfall.223

3.4.4 Public Involvement The public in both cities have been targeted in order to encourage water conservation.

52 Hong Kong Hong Kong’s The WSD in Hong Kong has engaged the public through WSD has made community-engagement programmes, allowing schools or groups only narrow efforts to engage to apply for educational visits to water-treatment plants. The WSD the public, but also opened a Water Resource Education Centre in 2012, which Singapore’s PUB educates primary school children on the importance of water has employed conservation. WSD also has a series of exhibitions that can be extensive 224 community loaned to corporations or schools for educational purposes. initiatives Singapore Singapore has employed more extensive community engagement initiatives than Hong Kong. Public relations in the water sector began in 1964, and PUB has been highly active ever since embarking on its first conservation campaigns in 1971. Through continual campaigns, PUB has pushed the concept of water as a valuable asset and been highly involved in schools. The PUB has even undertaken unconventional exercises such as interrupting water supply for 14 hours in 30,000 households in 1995 to remind the public of the hardship of water rationing.225

More recently, through its 3P Approach, PUB has looked to actively engage and educate Singapore’s public on the importance and value of the city’s water. PUB designed and launched a ‘Water Efficient Homes’ campaign in 2003, which was run and organised at the community level.

Under this campaign, residents were encouraged to install water- saving devices and follow good conservation practices. PUB provided free DIY kits to homes and ran roving exhibitions to demonstrate the measures. The 10-litre and 10 per cent Challenge also aimed at reducing domestic and non-domestic consumption.

In 2007, PUB set up a Water Efficiency Fund, which encourages industrial users to implement water-saving measures and promotes conservation in the community by providing financial support to those looking to implement innovative water-saving ideas.226 By engaging the community in this manner, PUB has made conserving water a community responsibility, thereby further encouraging water conservation.

53 4 Discussion & Policy Recommendations

4.1 Singapore’s Water Success Formula

4.1.1 Long-term Vision and Leadership Water has been Perhaps no modern country other than Singapore has ever rallied a priority since its entire population to focus on water solutions as a way of independence guarding national security. Political will and leadership are clearly the main drivers of its water success.

Ensuring supply As described, water has been a priority since birth for the country. was the focus in Throughout the 1960s the Singaporean Government focused on the 1960s but soon moved ensuring a stable water supply through importation, conservation towards water and the development of natural sources. In the 1970s, the focus independence was to put priority on water independence.227

Malaysia is Despite threats, Malaysia has never actually cut off Singapore’s considered a water, and has pledged to uphold the 1962 Agreement228, but water threat rather than a geo-political tension surrounding the issue has led Singapore to guarantee consider Malaysia as a danger to its water security229.

Water is a Singapore’s current Prime Minister has reiterated that water self- matter of life- sufficiency is a strategic priority, not just an economic one.230 The and-death, Chief Executive Officer of Singapore’s PUB has described water as not just an 231 economic “an issue of life-and-death” , and claimed that it is a matter of solution “national security” for Singapore to develop a long-term plan for water independence. Such vision and determination have directed the city-state’s political will coherently towards searching for a national solution.

4.1.2 Holistic Approach Water was Driven by long-term, visionary leadership, Singapore has incorporated developed a holistic approach to water resources management. into urban development Water was incorporated as a key factor in Singapore’s urban from the start development process and strong environmental policies were imposed alongside economic development. Policies aimed at

54 keeping natural water resources pollution free were set in a stringent and strictly enforced legal framework.

The 1972 Water The 1972 Water Master Plan was key to this long-term Master Plan development, acting as the blueprint for Singapore’s water was key to management throughout the 20 subsequent years. The plan was its long-term development considered innovative as it included not only developing surface water, but also unconventional water sources that could be developed in the future.

4.1.3 Integrated Management Structure PUB is responsible for managing the country’s water resources, from the first drop right through to its discharge.

One integrated Having one integrated department in charge of Singapore’s water national water resources enables them to be efficient, preventing resource waste agency ensures through lack of coordination or communication. The department efficiency and effectiveness also has a high degree of autonomy, giving it a high level of control over water resources, and enabling it to implement policies or increase tariffs which may be politically unfavourable. PUB’s ability to raise water tariffs has also made it financially viable.232

4.1.4 Constant Innovation Motivation Singapore has come a long way since its 1960s water-rationing to constantly days. Faced with the challenge of water scarcity, it has been develop motivated to constantly innovate and develop new water new water technologies management and treatment technologies such as water reclamation and desalination.

4.1.5 Tangible Benefits of Water Economics A water scare Over the past four decades, Singapore has established a city was diversified and sustainable water supply (the Four National transformed into a ‘global Taps) and built a sizeable and innovative water-purification and hydrohub’ to environmental-technology industry. The water sector alone its economic should see its value-added contribution to the GDP rise from advantages S$0.5 billion in 2003 to S$1.7 billion in 2015. Jobs in this sector are expected to double to about 11,000, and will largely comprise professional and skilled positions. As a ‘Global Hydrohub’, Singapore has attracted more than 70 companies with leading water treatment technologies to operate within its borders.233

55 4.1.6 Commitment to Growing the Water Industry Continuous The water industry was identified as a key growth area in substantial the country, with the Environment and Water Industry (EWI) investment in R&D to Programme Office set up in 2006 to spearhead the mission. develop cutting The government then committed S$330 million to fund R&D edge water and manpower development. In 2011, an additional allocation technologies for water R&D brought the total commitment to S$470 million. Government agencies such as the EWI and the Economic Development Board (EDB) are designated to chart the way in developing cutting-edge technology and exporting capabilities to growing markets especially in the Middle East and China.234

4.2 The Achilles Heel of Singapore’s Water Ambitions

4.2.1 One Strategic Vulnerability for Another Singapore Prioritising water does come with a cost. Cleaning and distributing seems to have requires a large amount of energy and Singapore imports 290 replaced water 3 235 vulnerability billion ft of natural gas annually to run its power plants . The with energy natural gas imported from Malaysia and Indonesia accounts vulnerability for about 80 per cent of energy generation in Singapore.236 This means that Singapore has essentially swapped “one strategic vulnerability for another237 so Malaysia still holds some political leverage over the city.

4.2.2 Diversified Energy Sources Have Diversified Vulnerabilities Diversifying Singapore is taking a proactive approach to diversify its energy energy sources sources. The city is currently developing a Liquefied Natural won’t change Gas (LNG) terminal which will enable LNG to be imported from the nature of energy countries all over the world. This will give Singapore geographical dependency energy diversity,238 however, it does not change the nature of energy dependency, nor does it change the degree of associated vulnerability.

4.2.3 Financial Sustainability Can energy- Singapore is seeking innovations to reduce the energy consumption intensive water required for water technologies and aiming to halve the energy sources remain required for producing desalinated water and NEWater. However, financially viable? research into developing low-energy methods is still relatively

56 young, so the energy costs remain high. Although Singapore has set tariffs to cover the cost of producing water through energy- intensive processes and funded research into new technologies239, how far it can mitigate its reliance on imported sources and maintain economic viability still remains unclear240.

4.3 Hong Kong’s Water Story

4.3.1 Lost in Transition Lost Drive for Water Self-Sufficiency The ready supply In early days, Hong Kong and Singapore fought to gain water of Dongjiang security in a similar way. However, Hong Kong’s drive gradually got water has made lost in the comfort of Dongjiang water, supply of which has been Hong Kong complacent in virtually guaranteed and was strengthened with the reunification. seeking water According to Article 9 of the Constitution of China241, Hong Kong is self-sufficiency entitled to share the country’s natural resources, including water. Therefore, under “One Country, Two Systems” there is no strong call for Hong Kong to seek water self-sufficiency.

It seems Furthermore, Hong Kong has enjoyed a prestigious position to have no in water resources management due to its status as a Special political determination Administrative Region, and enjoys the privilege of “one water, two to reduce systems” compared to others sharing the Dongjiang. Hong Kong dependency is not restricted by water shortages during Mainland droughts or susceptible to administrative orders from Mainland China.242 There is also the possibility that Hong Kong has been actively discouraged from reducing its dependence on Guangdong water.243 There is no political determination from either Mainland China or the local community to strive for water self-sufficiency.

No Economic Justification for Capital Spending? Investing in The ready supply of Dongjiang water has allowed Hong Kong not to expensive invest in self-sufficient water mechanisms or join the global push for technology is not water conservation.244 Purchasing water from Guangdong has long an option as long as Dongjiang been seen by Hong Kong officials as the cheap and easy option so water remains there has been little economic incentive for the HKSAR Government relatively cheap to invest in expensive technology.245

Unlike the politically independent Singapore, which is reliant on neighbour states for its water resources246, Hong Kong’s water may not seem to be subject to external pressures, again minimising the apparent need to invest for political stability.

57 No political Singapore initiated its move to self-sufficiency against the justification to backdrop of Malaysian-Singaporean water disputes, making spend on water self-resilience? water security an issue of nationalism and security. This has also become the economic justification for the Singaporean Government to spend US$475 million to US$634 million a year since 2006 on developing new technology for increasing its water supply247, instead of buying cheaper water from Malaysia. However, these options are not considered to be economically viable on such a large scale in Hong Kong.

Need for a Clearer Vision for Hong Kong beyond 2047 Hong Kong Hong Kong’s post-reunification government system is still lacks a clear finding its way. Initial ‘teething problems’ between the different vision for government departments, the public, and Mainland China’s its position beyond 2047 role in the city were understandable. However, 16 years since reunification, Hong Kong still lacks a clear vision for position in 2047, when the “One Country, Two Systems” framework reaches the 50-year mark. A visionary leadership for charting this change has yet to emerge.

Singapore In contrast, Singapore’s small size and the fact that it has been benefitted politically stable since its independence allows for the ruling from visionary party to plan ahead, develop and implement long-term plans. leadership which enabled Singapore’s ruling party has long prioritised water, and has long-term benefited from a strong political will and visionary leadership water plans style. This has enabled the government to coordinate and collaborate effectively between the different sectors and their objectives to be achieved efficiently.248

4.3.2 Economic Validity Overpowers Water Decision Cost-Considerations in Water Policy Making are Short-Sighted Cost- As shown in Chart 6, many of Hong Kong’s water-associated effectiveness government departments are under the Development Bureau, often which is overseen by the Financial Secretary. It is not unusual in determines Hong Kong’s water policy addresses for “cost-effectiveness” to take priority water solution over other considerations. In most cases, cost is the determining factor when exploring alternative water solutions.249

Cost gives In contrast, in Singapore, cost-effectiveness gives way to “life- way to “life- and-death” (Table 14). In its mission for water self-sufficiency, the and-death” in Singapore fact that desalination and NEWater cost hundreds of times more when water is than imported water does not deter the city from utilising these concerned water sources.

58 The cost gap However, there is an issue with cost in the long run for Hong between the Kong. While Dongjiang water is still relatively cheap (HK$8.4/m3 currently cheap 3 Dongjiang or US$1.08/m ), it is still more expensive than harvesting local water and rainwater (HK$4/m3 or US$0.5/m3). As the price of Dongjiang other sources is water increases, the cost gap between imported water and fast narrowing desalination or reclamation will narrow (Table 14). Imported in Hong Kong water’s current cost-effectiveness will not last forever.

Hong Kong Without a long-term government vision or strategy, Hong Kong will be poorly will not be ready to seize opportunities when population pressure placed when alternative in the PRD make them necessary, or when alternative water sources become resources do become financially viable. Waterworks require long- necessary or term planning, investment and thoughtful construction. “Digging financially a well while dying of thirst” will not safeguard Hong Kong’s well- viable being politically, economically or socially.

Table 14: Cost Comparison of Alternative Water Sources Cost of Water Sources in Cost of Water Sources in Hong Kong (currency/m3)250 Singapore (currency/m3)251 Water Source Cost In US$ Water Source Cost In US$ (HK$) (HK$1= (RM/m³) (RM1= US$0.13) US$0.31) Raw Dongjiang 4.8 0.62 Raw Johor 0.03 0.002 water water Treated 8.4 1.03 Treated Johor 2.41 0.169 Dongjiang water water Desalinated 12 1.55 Desalinated 7.42 0.515 water Water Reclamation 9.8 1.26 NEWater 3.71 0.257 (High Salinity) Rainwater 40.5 Harvesting

Political Nature of Dongjiang Water cannot be only Addressed Economically Addressing Treating water solely as a commodity can have a political cost. water purely as Failure to address the economics of water politically could result a commodity in tremendous economic losses, especially in water-stressed could cause 252 greater regions where competition can lead to conflict. Dongjiang economic water has been a “water of politics, water of life, and water of the losses economy” since supply to Hong Kong began253. This is the case for all cities sharing the Dongjiang’s water in China. As the Secretary for Development of the HKSAR said:

59 Dongjiang “As a responsible consumer of drinking water in the Pearl water is vital River Delta region, which is faced with increasing competition to the PRD, from other cities eager to secure their share of precious and Hong Kong must be a water resources, Hong Kong must earnestly investigate other good regional sources of water to satisfy its water demand, as well as make partner preparations for climate change and forecasted changes in rainfall”254.

Dongjiang’s water is critical to the sustainable development of the PRD, the maintenance of environmental justice makes it necessary for Hong Kong to control its use of Dongjiang water. If Hong Kong’s demand exceeds its allotment, then it must find alternative sources for itself255.

A price-based If Hong Kong continues to let its water strategy be governed water strategy by price, based on simple demand-supply calculation, political will damage consequences could emerge, which could be far beyond what and devalue 256 Hong Kong in economic means can fix . In the end, a water-crippled Hong the long run Kong can only be a burden to the region, devaluing itself in the long run.

4.3.3 Non-Sustainable Heavy Subsidies Hong Kong’s Not only does Hong Kong rely on the ready Dongjiang water water is heavily supply, but also its total water costs have long been out of touch subsidised by with reality. Despite the relative cheapness of Dongjiang water, taxpayers Hong Kong’s total water system has also been heavily subsidised by the taxpayer. Expenditures have increased every year from 2000 to 2012, and government subsidies increase each year in response. In the past 13 years, rate subsidies and exemption subsidies have totalled HK$43.95 billion (US$5.67 billion). The WSD has continuously operated as a cost centre during this period, accumulating losses of HK$8.7 billion (US$1.12 billion). Revenue from the collection of water fees equals to only 40 per cent of expenditure.257 The more water one uses, the more subsidies one receives, creating a perverse encouragement to waste.

Seawater is The above figures do not even include seawater consumption. 100 per cent Seawater accounts for more than 20 per cent of Hong Kong’s total subsidised water consumption and is provided free from the moment it is from supply to wastewater delivered for wastewater treatment until it is discharged into the treatment sea. Hong Kong’s water tariffs have been frozen since 1995 and there is no clear sign yet from the HKSAR Government that this will change soon. 60 4.3.4 Incomplete Total Water Management Inertia in Response to Real Threats The HKSAR Accelerating urbanisation and industrialisation around the Government Dongjiang places the river’s water under even higher pressure has yet to and competition.258 The Guangdong Provincial Government’s develop a prudent ability to protect the maximum amount that Hong Kong’s seven response in the million people demand against possible supply cuts, or against the face of a very other 40 million in the region is questionable.259 There is also no real threat assurance that the river will be able to keep up with a constant supply under this increasing pressure. In the face of this very real threat to Hong Kong’s water supply, it would be prudent for the HKSAR Government to develop a long-term strategy to ensure the sustainability of Hong Kong’s water in the future.

Total Water Management with Loose Ends The TWM does As one of the oldest government departments of Hong Kong, the not close the WSD has a long history of initiating, innovating and implementing water loop far-sighted water solutions, as discussed previously. The TWM is driven by the WSD, and many initiatives take place within the administrative power of the department. However, the so-called “total” water management strategy does not close the water loop.

The WSD believes that “given its geography and population, Hong Kong cannot acquire all of its water resources locally to support growth and development”260, therefore the other half of the total water resources loop, the side the DSD manages, has barely been considered. The direct result is that the WSD is only “targeting the production of reclaimed water… to supply the new development areas of the Northeast New Territories progressively after 2020”261. A segmented water management structure does not lend itself to developing a holistic approach either. Finally, the planned review on the 2008 TWM Strategy is yet to be realised.262

4.3.5 Segmented Management Facilitates Segmented As discussed in chapter 4.1, segmented water management management structures hinder holistic solutions, and in turn create the luxury allows for of being able to waste precious water resources. This is evident in waste the fact that spillage management and flood control operations are managed separately by the WSD and the DSD.

61 Reservoir In 2013, total spillage from Hong Kong reservoirs reached spillage and 40 mcm, equivalent to the planned annual desalination rainwater 263 interception capacity. Furthermore, rainwater discharged from the DSD’s directly from flood storage tanks in two locations totalled about 1.1 mcm in highlands to 2013.264 This figure does not include rainwater intercepted from the sea directly the highlands through three storm-water drainage tunnel systems waste a vast amount of and discharged directly into the sea under the DSD’s Drainage fresh water Master Plan. The main reason for employing drainage tunnel systems is to improve flood protection for urban areas so that less rainwater enters the existing drainage systems. By doing so, fewer conventional drainage construction works are required, and in turn less disruption to the city’s day-to-day life265. These considerations, again, are weighed in favour of cost-effectiveness rather than water self-reliance.

In contrast, the focus of Singapore’s policies has evolved over the past decade from survival to sustainability. Singapore’s starting point was the integration of the entire water supply, including the used-water and drainage systems. Integration allowed for a holistic approach to water management. This approach can be distilled into three principles: “to capture every drop of rain that falls on Singapore”, “to collect every drop of used water”, and “to recycle every drop of water more than once”.266

Hong Kong’s Under the current water policy management principles of Hong current Kong, the city’s catchment capacity of 586 mcm functions merely reliability as a storage guarantee, ensuring a reliable water supply under standard will be potentially extreme drought conditions. However, this storage defeated once is also temporary; it will only suffice while Hong Kong’s total consumption water consumption remains below 1,100 mcm per year. Once exceeds 1100 consumption increases beyond this level in 2030267, then even mcm per annum if all the reservoirs were only used to store water, Hong Kong’s guarantee against a once-in-a-century drought would be lost without an increase in catchment and storage capacities268.

4.3.6 Lack of Support for Water Innovation Minimal Spending on Environment as a Whole The ITF was The HKSAR Government established the Innovation and set up to Technology Commission (ITC) in 2000 to “spearhead Hong Kong’s spearhead 269 Hong Kong’s drive to become a world-class, knowledge-based economy” . competitive The Innovation and Technology Fund (ITF), administered by edge the ITC, aims to increase the added value, productivity and competitiveness of economic activities.270

62 Little of the However, very little has been spent on environmental technology. ITF has been A decade after the ITC’s establishment, only 2.3 per cent of total spent on 271 environment as funds have been distributed to the environmental sector. Of a whole this 2.3 per cent, funds went mainly to the “biggest local single environmental project – the SANI Process trial run” according to The Hong Kong University of Science and Technology.272

Competitive Edge, but Not Competitive Support The lack of In “The 12th National Five-Year Plan on Science and Technology support hinders Development”, “Science and Technology Areas where Hong Kong innovation Possesses a Competitive Edge” have been defined clearly, and from becoming solutions many Hong Kong universities that have leading water-innovation solutions have been identified. However, the ITF is still largely skewed towards electrical and electronics enterprises, foundation industries and information technology.273 Moreover, moving from the laboratory to commercialisation is complex. Without appropriate support for scientists and researchers, it is hard to turn innovation into a practice which can achieve economic benefit. Such a support system has yet to be developed.

4.3.7 Neglected Regional Responsibilities Hong Kong Hong Kong must realise that acting within the greater framework is liable for of “One Country, Two Systems” and “environmental justice” protecting requires self-reliance in some areas. It is jointly and separately the region’s resources, liable for bearing the burden of protecting the region’s resources and must be and environment. With regard to water resources, Hong Kong can proactive to no longer act short-sightedly while relying on Dongjiang water. partake a joint approach Nor can it continue being complacent instead of searching for alternative water solutions. Hong Kong’s thoughtful and cautious manner is prudent; but it must also be proactive and partake in a joint regional approach to the issue of drinking water in order to combat global climate change and reduce water stress.

Integrated The fact that Hong Kong is geographically, politically and regional economically backed by Mainland China means that convergent development is both a development is an inevitable macro trend. This should be seen by challenge and Hong Kong as an opportunity to renew its glory as an economic an opportunity engine. However to capitalise on this opportunity, Hong Kong for Hong Kong needs to become more water resilient.

63 4.4 Opportunities for Hong Kong

One might argue that Singapore’s innovative water resources planning and management have come about through sheer desperation. That may be the case, but Singapore’s policies also come from a clear national vision and coordinated efforts. As Singapore maps out its strategy for the next 50 years, what kind of plan does the HKSAR Government have to ensure a sustainable water system for the next generations?

4.4.1 Living on the Edge Population “Living on the edge” refers to both the increase of coastal density in inhabitants in the world and the pressing environmental issues coastal areas is expected to associated with it, especially on water systems as a whole. increase Coastal World By 2025, as According to the United Nations Environment Programme much as 75 (UNEP), approximately 3.4 billion people – over half of the world’s per cent of population – live in coastal areas, which adds up to only five per the global population cent of inhabited land. By 2025, as much as 75 per cent of the will live in the global population will live in the coastal fringes, with the majority coastal fringes living in vast watersheds that drain to the coast. High population concentration in coastal areas can be seen in Southeast Asia and West Africa. Currently, of the 33 largest megacities across the globe, 22 are located in coastal areas, while rapid population growth is also expected in many mid-sized urban centres of coastal areas.274

Coastal China Coastal China Similarly, coastal cities in China attract large populations to a is moving compact land area. Guangdong Province is home to nearly 8 per in a similar cent of China’s national population, over half of which lives in direction, coastal areas. The PRD, of which Hong Kong is the appendix, is especially Guangdong primarily coastal (Table 15). The Sixth National Population Census indicated that the pattern of inland populations moving to coastal areas will continue, especially in the south.275

64 Table 15: Population and Coastal Cities of China (2010)276 Number of cities Total population (billion) Coastal Total Coastal Total Pearl River 8277 9278 0.028279 0.032280 Delta Guangdong 14281 22282 0.058283 0.107284 Province China 53285 657286 0.243287 1.37288

Water Challenges in Coastal Regions Rapid Water scarcity and lack of sanitation continue to be worldwide issues urbanisation that are in many ways interlinked. Toilet-flushing is the key element of imposes modern sanitation systems, especially in cities. Rapid urbanisation in significant burden on coastal regions has created and will continue to impose a tremendous fresh water burden on both the fresh water and seawater systems. Toilets alone and seawater will strain the systems as flushing water usually represents 20-30 systems per cent of domestic water demand; and up to 70 per cent of water worldwide demand in commercial buildings.289

China urgently In China, water scarcity is a long-standing problem worsening due needs novel to climate change and pollution. Problems emerge from river solutions to combat water basins, are translated to the coastal regions, and then progress pollution to the sea. Over the past 20 years, mainstream water flows have and proper declined by 41 per cent in the Hai River Basin and 15 per cent in waste disposal the Yellow River and Huai River Basins.290 This has significantly including sludge reduced the loading capacity and natural purification ability of the waters and, in turn, worsened water pollution problems. To improve water quality, China has been constructing a large number of sewage treatment plants. The operation of sewage treatment plants generates a large amount of sludge, requiring treatment and disposal.

4.4.2 Challenges and Opportunities Global Challenges of Living on the Edge The global The world’s coastal areas are not only using a tremendous coastal areas amount of water, but are also discharging an enormous amount urgently need of wastewater (treated or untreated) directly into the sea, to environmentally- friendly and the direct detriment of ocean ecosystems. Conventional sewage economical treatment processes produce large quantities of waste sludge, and solutions to deal current sludge-minimisation, treatment and disposal technologies with effluent 291 and solid are unsustainable . More economic and environmentally-friendly discharge solutions are urgently needed.

65 Opportunities for Hong Kong Hong Kong is Hong Kong is part of the problem, but is also in a position to in a unique contribute to the solution. Increasing water self-reliance is the position to general trend for cities and regions worldwide due to the threat make major contributions of climate change and resource shortages. Hong Kong is no to the novel exception and it must do everything in its power to move in this solutions direction. For example:

• Under “One Country, Two Systems” and while the Dongjiang’s water is still flowing and available, Hong Kong can take bold actions to raise the city’s water self-reliance. This can be done through integrated solutions with a holistic approach. • Hong Kong should become an example of a “knowledge centre”, for coastal China, especially as it has pioneered systems such as the dual-water supply system, sewerage and storm-water separation, seawater toilet flushing, innovative waterworks in the sea and other new technologies, in order to move towards a complete solutions to food, water, energy and sanitation.292 • Hong Kong was one of the earliest cities in China to adopt a modern drainage system, separating sewage and storm- water over 100 years ago. This practice is now required by the Chinese government to prevent urban floods, combat epidemics and facilitate drainage management.293 • Although the potential of a rainwater harvesting system has yet to be explored, Hong Kong can be very helpful in providing Mainland China with practical ways to achieve this, especially in fellow coastal cities.

4.4.3 Potential for Hong Kong’s Water Economics: China’s Water Technology Hub? A potential market niche for Hong Kong in the water economy lies in alternative water-resources solutions and water treatments.

The World Water Market Trend a) Alternative Water Resources Integrated Reused water (either reclaimed or grey-water reuse) is fresh water, increasingly considered a sustainable supply of water for some grey water uses.294 Desalinated seawater is another widely-accepted and seawater systems have alternative water source for potable purposes. However, the potential direct use of seawater as well as an integrated system containing

66 fresh water, grey water and seawater are being developed, and have potential in coastal regions.295

b) Water Treatment China and India Global demand for water treatment technology and service will lead fast products was projected to increase by 5.7 per cent per year market growth reaching US$59 billion in 2013, well above the rate of economic in the water treatment growth in almost every region. China and India will register the sector fastest growth in the next few years.296

According to two recent market reports cited by WaterWorld Magazine, the marketplace for water treatment is evolving, with smaller players filling local needs as the influence of larger, global companies wanes.297

The China Water Market Trend a) Alternative Water Resources The newly The newly released national “Urban Drainage and Wastewater released Treatment Regulations《城鎮排水與污水處理條例》” will be effective national policy made the from 1 January 2014. The regulations call for sewage and market for storm-water separation in newly built areas; emphasise urban alternative wastewater treatment in the context of resource recycling and water resources pollution improvement, and demands that all reclaimed water be clear and sizable included in total water resources allocation schemes.298 Many cities have already set their water reuse targets. The market potential for investment is clearly sizable.299

b) Water Treatment Despite In the past seven years, China’s investment in wastewater increasing treatment alone accounted for more than RMB500 billion wastewater treatment, (about US$81.5 billion) and has increased urban wastewater sludge remains treatment capacity to cover 70 per cent of its total wastewater problematic emissions. However, at least 80 per cent of the resulting sludge and requires is neither treated, nor properly managed. This has caused urgent handling secondary pollution, damage to the environment, and food safety concerns.300

China’s water The world has its eyes on China’s enormous water treatment and treatment and reuse market. The Asian Development Bank recently announced reuse market is a low hanging that it will support China’s efforts to improve its wastewater fruit for the management and reuse with a US$240 million private sector loan rest of the package301. Singapore entered this market in 2006 and China is world now its second largest market in this area302.

67 Hong Kong’s Hong Kong is obligated to help, and in a position to do so. innovative Compared with other investors, it has deeper roots in China and solutions and connection to its entrepreneurship has developed side by side with Mainland China place it reform. Shared culture and economic bindings enable better in a position to understanding and allow for tailor-made approaches to finding transform into local solutions for water management problems. In short, Hong China’s water hub Kong has a golden opportunity to help the country while helping itself via an integrated water solution. In doing so, it can turn Hong Kong into China’s water hub.

4.5 Policy Recommendations

4.5.1 Put Water Back on the Policy Agenda Hong Kong is The HKSAR Government clearly needs to focus more on water running out policy, and address the issue proactively and holistically with of time for a long-term view. Waterworks projects can take decades from a long-term water strategy planning to operation. Also, Hong Kong needs an improved total that closes the water management strategy that closes the water loop, increases water loop water self-reliance and is sustainable for future generations, should the territory be faced with extreme conditions.

4.5.2 Envision Water Solutions to Envision Hong Kong beyond 2047 Hong Kong The HKSAR Government must start to reset its mind-set to look needs to look beyond 2047. It should do this by encouraging the whole society beyond 2047 to to envision all the pathways of Hong Kong beyond “One Country, instil long-term vision and drive Two Systems” and look down the “water road” that can take us progress there. Looking at vital issues such as water can help to instil long- term vision, a sense of mission and the society’s commitment to drive progress across the board.

4.5.3 Set an Integrated Management Mechanism to Close the Water Loop Consider The HKSAR Government should consider integrating all integrating all departments that handle water matters into one agency. This water handling will help close the water loop in terms of supply and drainage departments and resource management and control costs from a total lifecycle repositioning perspective. Even before this happens, the HKSAR Government DSD as an should consider repositioning the DSD as an alternative water alternative resources manager. This would be helpful in changing “waste- resources department and threat-response”-oriented thinking into a more resource-

68 appreciating mind-set, and eventually contribute to a holistic water solution for Hong Kong and its neighbours.

4.5.4 Improve Local Water Management Fix Hong Kong’s Hong Kong needs to know its own water systems better in order own water to face the challenges ahead constructively and imaginatively. In problems first regard to this, Civic Exchange’s policy recommendations published in the previous water policy research reports, Liquid Assets II, III and IV, stand valid and are attached in Appendix 2.

4.5.5 Capitalise on Hong Kong’s Characteristic Seawater Solutions Accelerate The HKSAR Government should urge the ITC to accelerate the development of development of innovations from laboratory to market. Specifically, innovations from the HKSAR Government and ITC can establish a task force to study lab to market to capitalise on how to provide policy, financial and talent support to promote and Hong Kong’s capitalise on Hong Kong’s unique lead in seawater solutions. Hong lead in seawater Kong should strive to become the Water Technology & Innovation solutions Hub of China.

4.5.6 Be Ready to Offer Wastewater Solutions Hong Kong has Hong Kong’s recognised expertise in wastewater treatment R&D R&D, policy and in operating systems right across the urban water cycle303 platform and hands-on form a solid foundation from laboratory to market: expertise in • The 2008 joint “Cleaner Production Partnership wastewater Programme” 304 between Hong Kong and Guangdong treatment that has already identified “Reducing and Controlling Effluent is ready to assist coastal Discharge” as one of its key objectives; China • The Cleaner Production Partnership Programme (CPPP) has established a mechanism between the HKSAR and Guangdong Governments to work closely to address issues; • The CPPP has been extended by two years to 31 March 2015, with additional funding of HK$50 million.

Hong Kong The Hong Kong Productivity Council (HKPC) is the implementation must grasp the agent for the CPPP. HKPC and the HKSAR Government should opportunity to grasp this opportunity to enlarge a valuable market niche and become China’s water hub press forward to establish Hong Kong as a “Water Knowledge Centre”, a “Wastewater Treatment Training Base”, and a “Water Technology Hub” of China.

If we do not do it, others will.

69 Appendix 1

Conversion Tables

Currency Conversion Table US$ 1 <––> HK$ 7.75 US$ 1 <––> RM 3.22 US$ 1 <––> S$ 1.25 US$ 1 <––> RMB 6.09 HK$ 1 <––> RM 0.42 HK$ 1 <––> RMB 0.79 HK$ 1 <––> S$ 0.16 S$ 1 <––> RM 2.57

Water Volume Conversion Table (metric vs imperial) 1 Cubic Metre = 219.78 Gallons 1 Gallon = 0.00455 Cubic Metres

70 Appendix 2

Policy Recommendations from Liquid Assets II – Industrial Relocation in Guangdong Province and Its Threats to Water Resources, Liquid Assets III – Dongjiang Overloaded, and Liquid Assets IV – Hong Kong’s Water Resources Management Under One Country, Two Systems:

The HKSAR Government would be well advised to:

1. Synchronise with New Mainland Water Policy: On February 2012, the State Council promulgated the 'Opinion on Implementing a Strict Management System for Water Resources'. This establishes limits on the development, use and protection of water resources. All local authorities are to “base their needs on water availability and act according to water availability”. While the “One Country, Two Systems” principle guides Mainland-Hong Kong relations, Hong Kong should not ignore the new State Council policy because the water resources that supply Hong Kong are in the Mainland. The PRD cities under the Dongjiang water allocation arrangements are governed by the new policy, thus Hong Kong should take it upon itself to observe the same policy. Indeed, under the “One Country, Two Systems” principle, the new Hong Kong administration taking power on 1 July 2012 can put forward its own policy that reflects Mainland policy so that Mainland-Hong Kong policies on water resources can be appropriately synchronised.

2. Devise Long-Term Strategy before Water Renegotiations The current water supply agreement between Guangdong Province and Hong Kong will have to be renegotiated before expiration in 2014. This gives the CY Leung administration less than a year to devise and consult on a long-term water strategy that emphasises water conservation in Hong Kong, as well as collaborate with Guangdong Province and other stakeholders to protect and manage the water resources of not only the Dongjiang but also the whole Pearl River Basin. Under this strategy, the HKSAR Government should consider: • Promptly call for an independent audit of Hong Kong’s seawater toilet flushing system to conserve public funds and reduce waste;

71 • Perform a cross-agency comprehensive audit of the complete lifecycle cost of Hong Kong’s water resources and establish an accounting mechanism for comprehensive water resources management; • Re-examine its water pricing structure on the condition that the “user pays” principle is truly reflected and that the grassroots’ interests will be protected; • Hong Kong should be open to explore whether it can set a cap on water usage and progressively reduce it; • Consult the public and set goals regarding the raising of Hong Kong’s water self-reliance; • Perform public outreach to help residents understand the source of their fresh water, the significance of Dongjiang water, and the challenges raised by the integrated development plans of the PRD. This would rally public opinion and facilitate changes in water use habits; • Set a higher target to reduce leakage rate: Even though the WSD has already accelerated the original plan by five years to replace old water pipes by 2020, the leakage rate will still be 15 per cent. The US, Japan, France and Germany have leakage rates below 10 per cent. Tokyo’s water leakage rate is only 3.3 per cent so Hong Kong can do better; • Set comprehensive policies and mid- to long-term goals for water recycling. These policies and goals must consider important factors such as climate change, energy efficiency, reduction of emissions, poverty reduction and benefits to the elderly; • Investigate alternatives for ensuring a 99 per cent reliability rate for Hong Kong’s water supply; • Investigate its responsibilities with respect to sharing water resources to carry out its obligations and uphold social justice under “One Water, Two Systems”; • Improve water efficiency and mandatory labelling: The entire public sector can lead by replacing water faucets and other water equipment to improve efficiency. Newly built public sector buildings, including housing, can be fitted with water efficiency equipment; and the Government can consider whether it would be appropriate to move from the current voluntary to mandatory water efficiency labelling; and • Reuse water wherever possible: Programmes to harvest rain water, use grey water and recycle water should be enhanced and expanded.

72 Appendix 3

The 3P Approach includes several initiatives to actively engage and involve the community, making the protection and conservation of water everyone’s responsibility.

Year Campaign Action 2003 Water Efficient Encourage installation of water saving devices and Homes conservation practices in homes 2004 Water Efficient Encourage building managers and owners to make Building Programme their building’s water efficient 2006 10 Litre Challenge Encourage households to reduce water consumption by 10 litres a day 2006 Active Beautiful and Clean, preserve and protect bodies of water Clean (ABC) Water 2007 Water Efficiency Provide business funding to implement water Fund conservation measures 2008 10per cent Challenge Encourage non-domestic consumers to reduce water consumption by 10 per cent monthly

73 Endnotes

1. People’s Government of Guangdong Province (2008), January 2003, Institute of Southeast Asian Studies, ‘東江流域水資源分配方案’, No. (2008) 50, http:// http://www.iseas.edu.sg/documents/publication/ search.gd.gov.cn/detail?record=20&channelid=8907 ef12003.pdf (accessed 7 November 2013). (accessed on 20 December 2013). 10. Tortajada, C., Joshi, Y.K., Biswas, A.K., The Singapore 2. Liu, S., ‘A Vulnerable Dongjiang is a Vulnerable Water Story: Sustainable Development in an Urban Hong Kong’, China Water Risk, 11 July 2012, http:// City State, p. 85, April 2013, Routledge, http://www. chinawaterrisk.org/opinions/a-vulnerable-dongjiang- routledge.com/books/details/9780415657839/ is-a-vulnerable-hong-kong/ (accessed 10 November (accessed 13 December 2013). 2013); Liu, S., Liquid Assets IV: Hong Kong’s Water 11. HKSAR Government (2013), ‘Hong Kong – The Facts’, Resource Management under “One Country, Two http://www.gov.hk/en/about/abouthk/facts.htm Systems”, July 2013, Civic Exchange, http://www. (accessed 7 November 2013). civic-exchange.org/wp/201307liquidassets4_en/ (accessed 10 November 2013); Liu, S., Liquid Assets 12. Department of Statistics of the Republic of Singapore IIIA: Dongjiang Overloaded ─ 2011 Dongjiang (2013), ‘Latest Data’, http://www.singstat.gov.sg/ Expedition Report, May 2012, Civic Exchange, http:// statistics/latest_data.html#12 (accessed 7 November www.civic-exchange.org/wp/201205overload_en/ 2013). (accessed 9 November 2013). 13. Census and Statistics Department of the HKSAR 3. ‘Hong Kongers should cut their water consumption Government (2012), ‘Hong Kong Population experts say’, South China Morning Post, 23 Projections 2012-2041’, http://www.statistics.gov. August 2013, http://www.scmp.com/lifestyle/ hk/pub/B1120015052012XXXXB0100.pdf (accessed 7 article/1298591/hongkongers-should-cut-their- November 2013). water-consumption-experts-say (accessed 20 14. Ministry of Trade and Industry of the Republic of November 2013). Singapore, A Sustainable Population for a Dynamic 4. Ibid. Singapore ─ Population White Paper, January 2013, http://www.mti.gov.sg/MTIInsights/Documents/ 5. Ibid. NPTDWP_LR.PDF (accessed 26 November 2013); 6. Census and Statistics Department of the HKSAR Kog, Y.C. (2001), Natural resource management and Government, ‘Population’, last update on 18 environmental security in Southeast Asia : a case November 2013, http://www.censtatd.gov.hk/hkstat/ study of clean water supplies to Singapore, Nanyang sub/so20.jsp (accessed 20 November 2013). Technological University, http://dr.ntu.edu.sg/ 7. In June 2013, the author contacted the Water handle/10220/4414 (accessed 26 November 2013). Supplies Department of the HKSAR Government to 15. Chen et al. (2012), ‘An Innovative Triple Water Supply request data on the annual total water consumption System and a Novel SANI Process to Alleviate Water from 1965 to present, and received a response the Shortages and Pollution Problems for Water-scarce same month. Coastal Areas in China’, Vol. 2, Issue 1, Journal of 8. Data for 1980 and earlier Censuses refer to all Water Sustainability, p. 122, http://www.jwsponline. persons present in Singapore and enumerated on com/uploadpic/Magazine/ppper cent20121-129per Census Day. Data from 2000 onwards are based cent20JWS-A-12-007.pdf (accessed 7 November on the register-based approach. Total population 2013). comprises Singapore residents and non-residents. 16. ASEM Water Resource Research and Development Resident population comprises Singapore citizens Center (no date), ‘The Republic of Singapore’, http:// and permanent residents. Data from 2003 onwards www.asemwater.org/AboutASEMWater/ASEMper exclude residents who have been away from cent20Members/2011-05-19/98.html (accessed 7 Singapore for a continuous period of 12 months or November 2013). longer as at the reference period. See http://www. 17. United Nations Department of Economic and Social singstat.gov.sg (accessed 10 November 2013). Affairs (2012), ‘Water Scarcity’, http://ww.un.org/ 9. Figures for years 2000 to 2012 based on water sales waterforlifedecade/scarcity.shtml (accessed 7 in Singapore found in: Ministry of the Environment November 2013). and Water Resources of the Republic of Singapore 18. HKSAR Government, ‘Water, Power and Gas Supplies’, (2013), ‘Water Resource Management’, http:// Hong Kong: The Facts, July 2013, http://www.gov.hk/ app.mewr.gov.sg/web/Contents/contents. en/about/abouthk/factsheets/docs/wp&g_supplies. aspx?ContId=682 (accessed 7 November 2013); pdf (accessed 7 November 2013). Department of Statistics of the Republic of Singapore (2009), ‘Yearbook of Statistics Singapore 2009’, 19. See pp. 16-19 of Liu (2013) in endnote 2; Ho, P.Y. http://cec.shfc.edu.cn/download/c4fbbb07-709a- (2003), 點滴話當年—香港供水一百五十年, first edition, 4353-9057-006c594d2d37.pdf (accessed 7 November The Commercial Press (Chinese only). 2013). Figures for years 1970 to 1990 from: Lee, P.O., 20. Public Utilities Board of the Republic of Singapore ‘The Water Issue Between Singapore and Malaysia: (2012), ‘Local Catchment Water’, http://www.pub. No Solution in Site?’, Economics and Finance no.1, gov.sg/water/Pages/LocalCatchment.aspx (accessed

74 7 November 2013). 38. In June 2013, the author contacted the Water 21. Public Utilities Board of the Republic of Singapore Supplies Department of the HKSAR Government (2012), ‘Marina Barrage’, http://www.pub.gov.sg/ to request data on the annual amount of rainfall Marina/Pages/3-in-1-benefits.aspx#wc (accessed 10 collected in reservoirs, the amount of water stored November 2013). at the beginning of each year, annual imports of Dongjiang water and total water consumption from 22. Water Supplies Department of the HKSAR 1965 to present, and received a response the same Government (2013), ‘Brief Introduction to month. The Department had records of annual Reservoirs’, http://www.wsd.gov.hk/en/education/ imports of Dongjiang water since 1965, annual fun_of_fishing_in_hong_kong/brief_introduction_ amount of rainfall collected in reservoirs since 1981, of_reservoirs/index.html (accessed 7 November and amount of water stored at the beginning of each 2013); Antiquities and Monuments Office of the year since 1989. Amount of rainfall collected from HKSAR Government (2013), Historic Building 1965 to 1980 each year was calculated by subtracting Appraisal, http://www. amo.gov.hk/form/brief_ that year’s total water consumption from that year’s information_grade2.pdf (accessed 7 November import of Dongjiang water. 2013). 39. See endnote 10. 23. List of Reservoirs refers to endnote 21; Water storage capacities data before 2004 from 40. Harris, P. (2012), Environmental Policy and Sustainable Segal, D., Singapore’s Water Trade with Malaysia and Development in China, p. 16, The Policy Press; see also Alternatives, Harvard University John F. Kennedy endnote 10. School of Government, 30 March 2004, http:// 41. The National Economic Action Council (2003), www.transboundarywaters.orst.edu/publications/ Water: The Singapore-Malaysia Dispute ─ The abst_docs/related_research/Segal-Singapore- Facts, http://starstorage.blob.core.windows.net/ Malaysiaper cent2004.pdf (accessed 7 November archives/2003/7/21/nation/waterbooklet2.pdf 2013); Pulau Tekong and Jurong reservoirs’ capacities (accessed 12 November 2013). are estimation using the total capacity of 142 mcm 42. Public Utilities Board of the Republic of before 2004 to subtract other reservoirs’ capacities. Singapore (2013), Our Water, Our Future, http:// Marina Barrage Reservoir’s storage capacity is an www.pub.gov.sg/mpublications/Documents/ estimation according to PUB’s information on the OurWaterOurFuture_2013.pdf (accessed 8 November current total daily water demand of Singapore 400 2013). million gallons and PUB’s statement that the Marina Barrage supplies up to 10 per cent of Singapore’s 43. See p. 15 of Liu (2013) in endnote 2. water demand (see also endnote 21). 44. Toh, E., ‘Quenching Singapore’s thirst’, The Straits 24. It must be noted that the capacity of Singapore Times, 3 September 2011. reservoirs is regarded as a national secret. Figures 45. Liu, S., ‘Hong Kong vs Singapore: the water story’, quoted in the above table are cited from academic CleanBiz.Asia, 6 September 2013, http://www. papers and estimated from various government cleanbiz.asia/blogs/hong-kong-vs-singapore-water- sources in the public domain. story#.UoXZ_qxWouI (accessed 10 November 2013). 25. No official data has been released since 2004. The 46. See endnote 42. 2008 estimated figure is not included. 47. Singapore International Water Week (2012), ‘City of 26. See endnote 11. Gardens and Water’, http://www.siww.com.sg/2012/ 27. See endnote 12. city-gardens-and-water (accessed 11 December 2013). 28. Central Intelligence Agency of USA (2013), ‘The World Factbook – Hong Kong’, https://www.cia.gov/library/ 48. See pp. 22-24 of Liu (2013) in endnote 2. publications/the-world-factbook/geos/hk.html 49. See pp. 13-33 of Liu (2013) in endnote 2. (accessed 9 November 2013). 50. See endnote 1. 29. Ibid. 51. Rainfall, local yield and water from supplied from 30. See endnote 11. Guangdong from: Water Supplies Department of the 31. National Environment Agency of the Republic of HKSAR Government (2013), ‘Miscellaneous Data’, Singapore (2013), ‘Weather Statistics – Records http://www.wsd.gov.hk/en/publications_and_ of Records of Climate Station Mean & Records of statistics/statistics/key_facts/miscellaneous_data/ Climate Station Extreme’, http://app2.nea.gov.sg/ index.html (accessed 7 November 2013). Seawater redirection-page?aspxerrorpath=/weather_statistics. consumption figures from: Water Supplies aspx (accessed 7 November 2013). Department of the HKSAR Government (no date), ‘Introduction to Water Supplies Department’, 32. See endnote 11. http://www.wsd.gov.hk/filemanager/common/ 33. See endnote 31. digital_resources/presentation/intro_to_wsd_e.pdf 34. See endnote 11. (accessed 7 November 2013). 35. See endnote 31. 52. See Ho (2003) in endnote 19. 36. See endnote 11. 53. See Liu (2013) of endnote 2. Imported water was drawn from the data sheet of Figure 2 ‘Water 37. See endnote 31. imported from Dongjiang’; Local catchment data was drawn from the same datasheet ‘Rainfall collected’;

75 Seawater was drawn from Table 11 ‘Amount of 66. Department of Statistics Singapore of the Republic seawater supplied’. of Singapore (no date), ‘Time Series on Per Capita 54. See p. 3 of endnote 42. The percentage of Imported GDP at Current Market Prices’, https://www.google. water is draw from: Caballero-Anthony, M. & com/url?q=http://www.singstat.gov.sg/statistics/ Hangzo, P.K.K., ‘From water insecurity to niche water browse_by_theme/economy/time_series/gdp. diplomacy: The Singapore experience’, NTS Insight, xls&sa=U&ei=NaIZUprXJIe_igKpvoGoAw&ved=0CAkQF November 2012, http://www.rsis.edu.sg/nts/HTML- jAB&client=internal-uds-cse&usg=AFQjCNF9CsX8Mew Newsletter/Insight/pdf/NTS_Insight_nov_1201.pdf 6O2lMAwrcSn9gnE6FfA (accessed 7 November 2013). (accessed 8 November 2013). The percentage of 67. Total water consumption is based on freshwater Local catchment is then calculated using 100 per cent consumption plus seawater consumption, sourced minus the sum of the above three percentages. from: Water Supplies Department of the HKSAR 55. Converted into US$ from HK$ at a rate of US$ 1 = HK$ Government (no date), Introduction to Water Supplies 7.78. See endnote 11. Department, http://www.wsd. gov.hk/filemanager/ common/digital_resources/presentation/intro_to_ 56. Converted into US$ from Singapore dollar (S$) at a wsd_e.pdf (accessed 7 November 2013). rate of US$ 1 = S$ 1.25. See Ministry of Trade and Industry of the Republic of Singapore (no date), 68. Figures based on water sales in Singapore found in: ‘Key Economic Indicators’, http://www.mti.gov.sg/ Ministry of the Environment and Water Resources ResearchRoom/Pages/default.aspx (accessed 20 of the Republic of Singapore, ‘Water Resource November 2013). Management’, 22 August 2013, http://app.mewr. gov.sg/web/Contents/contents.aspx?ContId=682 57. Hong Kong Economic and Trade Office (Sydney) of the (accessed 7 November 2013); Department of HKSAR Government (2011), ‘Hong Kong Economy’, Statistics of the Republic of Singapore (2009), http://www.hketosydney.gov.hk/hkeconomy.php ‘Yearbook of Statistics Singapore 2009’, http://cec. (accessed 20 November 2013). shfc.edu.cn/download/c4fbbb07-709a-4353-9057- 58. Department of Statistics of the Republic of Singapore, 006c594d2d37.pdf (accessed 7 November 2013). ‘National Accounts’, November 2013, http://www. 69. Data derived from per capita freshwater singstat.gov.sg/statistics/browse_by_theme/ consumption plus per capita flushing water national_accounts.html (accessed 27 December consumption, date for years 2003 to 2007 2013). from: Water Supplies Department of the HKSAR 59. For Hong Kong data, see endnote 61. For Singapore Government (2008), Annual Report 2007/2008, data, see endnote 62. http://www.wsd.gov.hk/filemanager/en/share/ annual_reports/rpt0708/menu.htm (accessed 14 60. See pp. 34-43 of Liu (2013) in endnote 2. November 2013). Data for 2007 to 2011 from: Water 61. Water Supplies Department of the HKSAR Supplies Department of the HKSAR Government Government (2012), ‘Securing Our Water Supplies’, (2012), ‘Appendices and Annexes’, Annual Report Annual Report 2011/2012: Enhancing Resilience of 2011/2012: Enhancing Resilience of Water Supply, Water Supply, http://www.wsd.gov.hk/filemanager/ http://www.wsd.gov.hk/filemanager/common/ common/annual_report/2011_12/pdf/07.pdf annual_report/2011_12/pdf/13.pdf (accessed 14 (accessed 7 November 2013). November 2013). 62. See Lee (2003) in endnote 9. 70. Data for years 2000 to 2007 from: Public Utilities 63. Population data for 2003 to 2011 sourced from: Board of the Republic of Singapore (2008), PUB Census and Statistics Department of the HKSAR Financial Report 2007/2008, http://www.pub.gov.sg/ Government, Demographic Trends in Hong Kong 1981- mpublications/Lists/AnnualReport/Attachments/7/ 2011, December 2012, http://www.statistics.gov.hk/ PUBper cent20ARFper cent2007-08.pdf (accessed 14 pub/B1120017032012XXXXB0100.pdf (accessed 7 November 2013). Data for years 2007 to 2012 from: November 2013). For 2012 population, see endnote Ministry of the Environment and Water resources of 11. the Republic of Singapore (no date), ‘Water for All’, http://app.mewr.gov.sg/web/Contents/contents. 64. Population data for 2003 to 2005 from: Department aspx?ContId=682 (accessed 14 November 2013). of Statistics Singapore of the Republic of Singapore (no date), Singapore Residents Population 2003- 71. HKSAR Government, ‘Press releases: LCQ9: Use of 2007, http://www.singstat.gov.sg/Publications/ water resources’, 9 November 2011, http://www.info. publications_and_papers/population_and_ gov.hk/gia/general/201111/09/P201111090226.htm population_structure/respop.pdf (accessed 7 (accessed 11 November 2013). November 2013). Department of Statistics Singapore 72. See endnote 17. of the Republic of Singapore, ‘Population’, 30 73. See pp. 85 & 232 of endnote 10. September 2013, http://www.singstat.gov.sg/ Publications/population.html#population_and_ 74. Public Utilities Board of the Republic of Singapore population_structure (accessed 7 November 2013). (2013), ‘Conserve’, http://www.pub.gov.sg/conserve/ Pages/default.aspx (accessed 11 November 2013). 65. Census and Statistics Department of the HKSAR Government (2013), Hong Kong Monthly Digest of 75. Tan, D., ‘8 Take Aways: 2 Degrees Celsius + Water’, Statistics, years 2003 to 2012, http://www.censtatd. China Water Risk, 9 May 2012, http://chinawaterrisk. gov.hk/hkstat/sub/sp50.jsp?productCode=B1010002 org/resources/analysis-reviews/8-takeaways-two- (accessed 13 December 2013). degrees-celsius-water/ (accessed 11 November 2013).

76 76. See pp. 54-57 of Liu (2013) in endnote 2. 91. Water Supplies Department of HKSAR Government 77. ‘A New Desalination Plant in Hong Kong’, HK (2012), ‘Water from Dongjiang to Guangdong’, http:// Magazine, 27 October 2011, http://hk.asia-city.com/ www.wsd.gov.hk/en/water_resources/raw_water_ health/article/new-desalination-plant-hong-kong sources/water_sources_in_hong_kong/water_from_ (accessed 11 November 2013). dongjiang_at_guangdong/index.html (accessed 12 November 2013). 78. Water Supplies Department of the HKSAR Government (2013), ‘Water and Sewage Tariffs’, 92. ‘揭秘周恩來總理親自批准興建的香港“生命之水”’, http://www.wsd.gov.hk/en/customer_services_and_ Chinanews, 12 June 2012, http://www.chinanews. water_bills/water_and_sewage_tariff/water_and_ com/ga/2012/06-12/3956023.shtml (accessed 30 sewage_tariff/index.html (accessed 7 November June 2013). (Chinese only) 2013). 93. The 30 years following the establishment of New 79. See pp. 89-98 of endnote 10. China were fraught with difficulties. In particular: the western powers led by the United States 80. Genasci, L., ‘Hong Kong’s Water Supply Far from imposed a trade embargo on China after China Secure’, genascihk.com, 13 May 2012, http:// aided North Korea in the Korean War (see ‘霍英 genascihk.com/2012/05/13/hk-water/ (accessed 11 東談—抗美援朝期間支持新中國建設的幾段往事’, 人 November 2013). 民政協報, 3 September 2009, http://epaper.rmzxb. 81. Public Utilities Board of the Republic of Singapore com.cn/2009/20090903/t20090903_273565. (2013), ‘Water Pricing in Singapore’, http://www.pub. htm, accessed 13 December 2013, Chinese only); gov.sg/general/Pages/WaterTariff.aspx (accessed 7 by 1956, nearly all foreign investments and November 2013). foreign companies had departed China (see ‘毛 澤東時代的中英經貿關係’, 中共中央黨校博士學位論 82. Ibid. 文, 1995, Chinese only); the Great Leap Forward 83. Tartayada, C., & Joshi, Y.K., ‘Water Demand from 1958-60 (see “‘ 大躍進”運動’, Xinhuanet, 20 Management in Singapore: Involving the Public’, 2 January 2003, http://big5.xinhuanet.com/gate/ March 2013, Springer, http://www.thirdworldcentre. big5/news.xinhuanet.com/ziliao/2003-01/20/ org/watdemsingapore.pdf (accessed 12 November content_698127.htm, accessed 27 June 2013, 2013). Chinese only); the breakdown of Sino-Soviet relations 84. Upson, S., ‘Singapore’s Water Cycle Wizardry’, IEEE in 1960 which resulted in skyrocketing foreign Spectrum, 28 May 2010, http://spectrum.ieee.org/ debt; the Three Bitter Years of 1960-62 (see ‘中共 energy/environment/singapores-water-cycle- 黨史首次證實1960年人口銳減1千萬’, Netease, re- wizardry (accessed 12 November 2013). directed from 新京報, 21 February 2011, http:// news.163.com/11/0221/02/6TCO798900014AED. 85. Chiplunker, A., Seethram, K., Tan, C.K. (2012), html, accessed 26 November 2013, Chinese only); Good Practices in Urban Water Management, Asian the Cultural Revolution of 1966-76 (see ‘文化大 Development Bank, National University of Singapore, 革命’, Xinhuanet, 20 January 2003, http://news. http://reliefweb.int/sites/reliefweb.int/files/ xinhuanet.com/ziliao/2003-01/20/ content_697889. resources/good-practices-urban-water-management. htm, accessed 27 June 2013, Chinese only); and the pdf (accessed 12 November 2013). generous amounts of foreign aid granted by China 86. See pp. 89-98 of endnote 10. when it could scarcely afford to do so (see Yun Shu (2009), ‘糾正與國力不符的對外援助—中國外援往事’, 87. See endnote 3. redirected from 同舟共進, 2009, Vol. 1, Universities 88. Water charges from: Water Supplies Department Service Centre for China Studies, The Chinese of the HKSAR Government (no date), ‘Comparison University of Hong Kong, http://www.usc.cuhk.edu. of water charges for domestic accounts in Hong hk/PaperCollection/Details.aspx?id=7198, accessed Kong with other major cities’, http://www.wsd.gov. 27 June 2013, Chinese only). hk/filemanager/en/content_765/water_charges_ 94. 歐陽湘, 唐富滿, ‘特載: 從內地對港澳地區的出口供應看 comparison.pdf (accessed 7 November 2013). 中國共產黨的港澳工作方針(1949－1978)’ (Part 1 and GDP data from: Istrate, E. & Nadeau, C.A., ‘Global Part 2), 新華澳報, 10 and 17 January 2013, http:// MetroMonitor,’ Brookings Research, 30 November www.waou.com.mo/detail.asp?id=66617 (Part 1) and 2012, http://www.brookings.edu/research/ http://www.waou.com.mo/detail.asp?id=66785 (Part interactives/global-metro-monitor-3 (accessed 19 2), accessed 22 July 2013 (Chinese only). December 2013). 95. See p. 23 of Liu (2013) in endnote 2. 89. Table of years 1960 to 1989 sourced from: Lee, W. et al., Achieving Sustainable Clean Water Supply 96. ‘東深供水改造工程’, people.com.cn, 30 January 2011, in South China, p. 7, March 2005, Civic Exchange, http://scitech.people.com.cn/GB/25509/56813/213 http://www.civic-exchange.org/wp/wp-content/ 022/213263/13850493.html (accessed 2 July 2013). uploads/2010/12/200503_water.pdf (accessed 7 (Chinese Only) November 2013). 1998 Loan Agreement data from: 97. Ibid. Audit Commission of the HKSAR Government, ‘Water Purchased from Guangdong Province’, 11 October 98. Audit Commission of the HKSAR Government, ‘Water 1999, http://www.aud.gov.hk/pdf_e/e33ch12.pdf Purchased from Guangdong Province’, 11 October (accessed 7 November 2013). 1999, http://www.aud.gov.hk/pdf_e/e33ch12.pdf (accessed 7 November 2013). 90. See p. 22 of Liu (2013) in endnote 2. 99. See p. 29 of Liu (2013) in endnote 2.

77 100. Legislative Council Panel on Development of the hket.com/eti/article/540a9a64-7c50-4cd1-a1e0- HKSAR Government (2013), ‘Background brief on the 7bfa9ba4bd1e-045646 (accessed 8 July 2013). supply and quality of Dongjiang water’, LC Paper No. (Chinese only) CB(1)734/12-13(04), http://www.legco.gov.hk/yr12- 123. For example, Lu quoted in: Cheung, G. & Lau, S., 13/english/panels/dev/papers/dev0326cb1-734-4-e. ‘Love China or Leave it’, South China Morning Post, 1 pdf (accessed 12 November 2013). November 2012, http://www.scmp.com/news/hong- 101. Ibid. kong/article/1074148/love-china-or-lump-it-lu-ping- 102. See endnote 98. tells-would-be-secessionists?page=all (accessed 12 November 2013). 103. See endnote 77. 124. Long, J., ‘Desecuritizing the Water Issue in Singapore- 104. See endnote 91. Malaysia Relations’, Contemporary Southeast Asian, 105. ‘Interview with Bobby Ng (WSD) ─ The Future of Hong Vol. 23, No. 3, p. 506, December 2001, Institute of Kong Water’, China Water Risk, 11 September 2012, Southeast Asian Studies (ISEAS). http://chinawaterrisk.org/interviews/the-future-of- 125. Ibid. hong-kong-water/ (accessed 12 November 2013). 126. See p. 18 of endnote 10. 106. See pp. 39-41 of Liu (2012) in endnote 2. 127. See pp. 11-12 of endnote 10. 107. Breakdown of water agreements found in: Chew, V. (2009), ‘Singapore ─ Malaysia water agreements’, 128. See p. 2 of Lee (2003) in endnote 9. Singapore Infopedia, http://infopedia.nl.sg/articles/ 129. See Lee (2003) in endnote 9. SIP_1533_2009-06-23.html (accessed 8 November 130. Ibid. 2013) and see also pp.169-171 of endnote 10. 131. See Segal (2004) in endnote 23. 108. See Chew (2009) in endnote 107. 132. See p. 2 of Lee (2003) in endnote 9. 109. Ibid. 133. See Lee (2003) of endnote 9. 110. See p. 36 of endnote 10. 134. Kolesnikov, S., ‘Malaysia-Singapore water issue 111. See Chew (2009) in endnote 107. boiling’, Singapore Window, 28 January 2002, http:// 112. Ibid. www.singapore-window.org/sw02/020128up.htm 113. Yang, L., Zhang, C., Ngaruiya, G.W. (2012), ‘Water (accessed 12 November 2013). Supply Risks and Urban Responses under a Changing 135. See Segal (2004) in endnote 23. Climate: A Case Study of Hong Kong’, Pacific 136. See pp. 10-12 of Lee (2003) in endnote 9. Geographies, http://www.pacific-news.de/pg39/ pg39_Liangper cent20Yang_et_al.pdf (accessed 12 137. See Segal (2004) in endnote 23. November 2013). 138. Ministry of Information of the Republic of Singapore 114. Choong, K.Y., Natural Resource Management and (2003), Water Talks? If Only it Could, January, Environmental Security in Southeast Asia: Case Study Communications and Arts. of Clean Water Supplies in Singapore, May 2001, 139. See endnote 41. Institute of Defence and Securities Studies, http:// 140. Kuppusamy, B., ‘Malaysia-Singapore: Political Storm www.rsis.edu.sg/publications/WorkingPapers/WP15. Over Water Comes, Goes’, Inter Press Service pdf (accessed 12 November 2013). News Agency, 30 July 2003, http://www.ipsnews. 115. See Liu (2013) in endnote 2. net/2003/07/malaysia-singapore-political-storm- 116. Wang, X.W., & Lo, J. (2003), ‘Beijing sides with Hong over-water-comes-goes/ (accessed 12 November Kong on water deal’, South China Morning Post, 13 2013). August 2003, http://www.scmp.com/article/424656/ 141. See pp. 12-15 of Lee (2003) in endnote 9. beijing-sides-hk-water-deal (accessed 12 November 142. ‘Introducing newater’, The Economist, 9 January 2003, 2013). http://www.economist.com/node/1527091 (accessed 117. See endnote 98. 12 November 2013). 118. Ibid. 143. See Segal (2004) of endnote 23. 119. See pp. 9-16 of Liu (2012) in endnote 2. 144. See endnote 140. 120. National Development and Reform Commission 145. See endnote 41. of People’s Republic of China, 珠江三角洲地區改 146. See Segal (2004) of endnote 23. 革發展規劃綱要 (2008-2020), December 2008, http://www.gdep.gov.cn/hbgh/ghjh/ghjh/201008/ 147. HKSAR Government (2013), ‘The Organisation P020100804604719020540.pdf (accessed 8 July Chart of the Government of the Hong Kong Special 2013). (Chinese only) Administrative Region’, http://www.gov.hk/en/about/ govdirectory/govchart/ (accessed 10 November 2013). 121. ‘水量分配方案是取水紅綫’, Nanfong Daily, 11 December 2008, http://epaper.nfdaily.cn/html/2008- 148. Ministry of the Environment and Water Resources 12/11/content_6708769.htm (accessed 2 March of the Republic of Singapore (2013), ‘Statutory 2012). (Chinese only) Boards PUB’, http://app.mewr.gov.sg/web/Contents/ contents.aspx?ContId=1589 (accessed 10 November 122. Kwan, C.C., ‘反省競爭排名降攻教育降成本’, Hong 2013). Kong Economic Times, 19 June 2013, http://www.

78 149. Government of the Republic of Singapore (2013), 161. See endnote 100. ‘Cabinet Appointments’, http://www.cabinet.gov. 162. See p. 2 of Lee (2003) in endnote 9. sg/content/cabinet/appointments.html (accessed 10 December 2013); The Government of the Republic 163. See Caballero-Anthony & Hangzo (2012) in endnote of Singapore (2013), ‘Directory’, http://app.sgdi. 54. gov.sg/listing.asp?agency_subtype=dept&agency_ 164. State Water Control Board (2008), ‘Water id=0000000004 (accessed 10 December 2013); Reclamation and Water Reuse Regulations’, http:// Ministry of Environment and Water Resources of the www.fairfaxcounty.gov/dpwes/construction/water_ Republic of Singapore (2013), ‘About Us’, http://app. reuse/waterreclamation.pdf (accessed 14 November mewr.gov.sg/web/Contents/Contents.aspx?Id=189 2013). (accessed 10 December 2013); Public Utilities Board 165. Lemonick, S. (2013), ‘Drinking toilet water: The of the Republic of Singapore (2013), ‘Organisation science and (psychology) of wastewater recycling’, Chart’, http://www.pub.gov.sg/about/Pages/ Earth Magazine, http://www.earthmagazine.org/ OrganisationChartImage.aspx (accessed 10 December article/drinking-toilet-water-science-and-psychology- 2013). wastewater-recycling (accessed 13 November 2013). 150. Water Supplies Department of the HKSAR 166. HKSAR Government (2013), ‘Use of Reclaimed Water’, Government (2008), Total Water Management, http://www.gov.hk/en/residents/environment/ http://www.wsd.gov.hk/filemanager/en/share/pdf/ water/usereclaimedwater.htm (accessed 13 TWM.pdf (accessed 12 November 2013). November 2013). 151. Ibid. 167. Legislative Council Panel on Development of 152. Ibid. the HKSAR Government (2010), ’Progress of 153. Fresh water resources data from Water Supplies Implementation of Total Water Management’, LC Department of the HKSAR Government (2013), Paper No. CB(1)1919/09-10(03), p. 9, http://www. ‘Miscellaneous Data’, http://www.wsd.gov.hk/en/ legco.gov.hk/yr09-10/english/panels/dev/papers/ publications_and_statistics/statistics/key_facts/ dev0525cb1-1919-3-e.pdf (accessed 14 November miscellaneous_data/index.html (accessed 7 2013). November 2013). Seawater data from Drainage 168. See endnote 166. Services Department HKSAR Government (2013), 169. Water Supplies Department of the HKSAR 2011-12 Annual Report, http://www.dsd.gov.hk/EN/ Government, ‘Examination of Estimates of Files/annual_reports/1112/index.html (accessed 10 Expenditure 2012-2013, Controlling Officers Written November 2013). Reply to Initial Questions’, DEVB(W)076, April 2013, 154. The proportion of 2020 fresh water recourses is http://www.wsd.gov.hk/filemanager/en/share/pdf/ projected based on 2012 data. The proportion sfc_e_2013-14.pdf (accessed 14 November 2013). of desalinated water from HKSAR Government 170. HKSAR Government, ‘Press releases: LCQ14: Seawater (2013), ‘Desalination Plant Possible in 2020’, http:// Desalination Technology’, 22 May 2013, http://www. www.news.gov.hk/en/categories/infrastructure/ info.gov.hk/gia/general/201305/22/P201305220523. html/2013/05/20130522_182816.shtml (accessed 8 htm (accessed 14 November 2013). November 2013). 171. Tortajada, C. (2006), Singapore: An Exemplary Case 155. Newater data retrieved from: Public Utilities Board of for Urban Water Management, http://hdr.undp. the Republic of Singapore (2013), ‘NEWater’, http:// org/en/reports/global/hdr2006/papers/cecilia_ www.pub.gov.sg/water/newater/Pages/default.aspx tortajada_singapore_casestudy.pdf (accessed 14 (accessed 7 November 2013). Desalinated water data November 2013). retrieved from: Public Utilities Board of the Republic of Singapore (2013), ‘Desalinated Water’, http:// 172. Public Utilities Board of the Republic of Singapore www.pub.gov.sg/WATER/Pages/DesalinatedWater. (2010), ‘The Newater Treatment Process’, aspx (accessed 7 November 2013). Data for imported http://www.pub.gov.sg/LongTermWaterPlans/ water percentage found in: Caballero-Anthony wfall_3rdtapa.html (accessed 14 November 2013). & Hangzo (2012) of endnote 54. Targets for local 173. Public Utilities Board of the Republic of Singapore catchment and imported water estimated based (2013), ‘NEWater’, http://www.pub.gov.sg/water/ on percentage targets given for Newater and newater/Pages/default.aspx (accessed 7 November desalinated water. 2013). 156. Public Utilities Board of the Republic of Singapore 174. See p. 233 of endnote 10. (2013), ‘Four National Taps Provide Water for All’, http://www.pub.gov.sg/water/Pages/default.aspx 175. Coffey, M. (no date), ‘Amiad’s Pre-Treatment Systems (accessed 12 November 2013). Used in NEWater Factories’, IDS-Water-White Paper, http://www.idswater.com/Common/Paper/ 157. See endnote 155. Paper_266/NEWATER_Clarityper cent20Paperper 158. See p. 3 of endnote 42. cent20html.htm (accessed 19 December 2013). 159. HKSAR Government (2013), ‘Press releases: LCQ20: 176. See endnote 83. Fresh Water Supply’, http://www.info.gov.hk/gia/ 177. Holbrook. E., (2009) ‘Water, Water Everywhere...But general/201302/27/P201302270327.htm (accessed 12 Not Enough For Business’, Risk Management, http:// November 2013). cf.rims.org/Magazine/PrintTemplate.cfm?AID=3920 160. See endnote 105. (accessed 14 November 2013).

79 178. See endnote 84. 203. About SANI Process: Conventional biological 179. See endnote 172. wastewater treatment processes make use of microbes to convert pollutants in water into carbon 180. See endnote 84. dioxide in order to sanitise wastewater. Since 181. See pp. 120-121 of endnote 10. microbes grow rapidly, conventional processes produce large amounts of microbes which become 182. See endnote 156. sludge. The SANI Process technology, on the other 183. See pp. 232-233 of endnote 10. hand, makes use of a common microbe called 184. Ibid. Sulphate-reducing bacteria, which makes use of Sulphate in seawater as the medium to oxidise and 185. Ibid. eliminate pollutants. Since the microbe boasts high 186. Public Utilities Board of the Republic of Singapore efficiency and low growth rate, it minimises sludge (2013), ‘Treatment and Recovery of RO Brine for production by 90 per cent, hence its naming as SANI Higher Recovery in NEWater Factories’, http:// Process, meaning “sludge-killing” in Chinese. www.pub.gov.sg/research/Key_Projects/Pages/ 204. The Hong Kong University of Science and Technology, UserWater4.aspx (accessed 14 November 2013). ‘Press Release: HKUST Kicks off Hong Kong’s Novel 187. International Desalinisation Association (2012), Sewage Treatment Technology Trial Run, securing the ‘Desalination Overview’, http://www.idadesal.org/ Biggest Sponsorship with Five International Awards’, desalination-101/desalination-overview/ (accessed 13 December 2012, http://www.ust.hk/eng/news/ 12 November 2013). press_20121213-1005.html (accessed 10 November 2013). 188. See p. 2 of Lee (2003) in endnote 9. 205. Water Supplies Department of the HKSAR 189. Global Water Intelligence, Desalination Gets a Fresh Government (2013), ‘Miscellaneous Data’, http:// Start in Hong Kong, vol. 13, issue 7, July 2012, http:// www.wsd.gov.hk/en/publications_and_statistics/ www.globalwaterintel.com/archive/13/7/general/ statistics/key_facts/miscellaneous_data/index.html desal-gets-fresh-start-hong-kong.html (accessed 12 (accessed 7 November 2013). November 2013); Le Clue, S., ‘Hong Kong: Stepping Up Water Security?’, China Water Risk, 11 September 206. Leung et al. (2012), ‘Integration of seawater and 2012, http://chinawaterrisk.org/resources/analysis- grey water reuse to maximise alternative water reviews/hong-kong-stepping-up-water-security/ resource for coastal areas: the case of the Hong Kong (accessed 12 November 2013). International Airport’, Water Science Technology, 65(3), 410-417. 190. Public Utilities Board of the Republic of Singapore (2013), ‘Desalinated Water’, http://www.pub.gov.sg/ 207. See pp. 121-129 of endnote 15. WATER/Pages/DesalinatedWater.aspx (accessed 7 208. Ng, W. (2006), ‘The Environmental Sustainability November 2013). of Grey Water Recycling in Hong Kong Housing’, 191. Ibid. University of Hong Kong, http://hdl.handle.net/ 10722/131569 (accessed 14 November 2013). 192. See pp. 233-234 of endnote 10. 209. Ibid. 193. Public Utilities Board of the Republic of Singapore (2010), ‘Lowering Energy Consumption 210. Public Utilities Board of the Republic of Singapore in Desalination’, http://www.pub.gov.sg/ (2013), ‘Variable Salinity Plant’, http://www.pub.gov. LongTermWaterPlans/pipeline_LowerEgy.html sg/research/Key_Projects/Pages/Membrane1.aspx (accessed 12 November 2013). (accessed 14 November 2013). 194. See p. 233 of endnote 10. 211. See endnote 85. 195. See endnote 175. 212. See p. 18 of endnote 150. 196. Advancing the Chemical Science, ‘Keeping the 213. Legislative Council Panel on Development of the Tap On’, February 2012, http://www.rsc.org/ HKSAR Government (2012), ‘Follow up action to chemistryworld/Issues/2012/February/desalination- meeting on 17 April 2012, 9345WF – Planning and keeping-tap-on.asp (accessed 12 November 2013). investigation study of desalination plant at Tseung Kwan O’, LC Paper No. CB(1) 1795/11-12(01), http:// 197. Water-technology.net (2012), ‘Tuas Seawater www.legco.gov.hk/yr11-12/english/panels/dev/ Desalination Plant- Singapore’, http://www.water- papers/dev0417cb1-1795-1-e.pdf (accessed 14 technology.net/projects/tuas-seawater-desalination/ November 2013). (accessed 12 November 2013). 214. Public Utilities Board of the Republic of Singapore 198. See pp. 232-233 of endnote 10. (2010), ‘Ready for the Future’, http://www.pub. 199. See endnote 100. gov.sg/longtermwaterplans/wfall_rotf_wts.html 200. See endnote 15. (accessed 14 November 2013). 201. Chen G.H., ‘A Novel Total Water Management System 215. Ibid. for Energy Saving and Resource Recovery in Coastal 216. See p. 147 of endnote 10. Cities’, Hong Kong Baptist University, 8 December 217. See pp. 35-59 of endnote 10. 2011, http://arcpe.hkbu.edu.hk/en/events_detail. php?id=23 (accessed 14 November 2013). 218. Grieve, A., ‘Breaking Hong Kong’s Addiction to Imported Water’, 15 December 2011, http:// 202. Ibid.

80 thoughts.arup.com/post/mobiledetails/153/...- industries/environment-and-water.html (accessed 10 [trackback]- (accessed 14 November 2013). November 2013). 219. See endnote 150. 235. See endnote 84. 220. See endnote 169. 236. US Energy Information Administration (2013) 221. Public Utilities Board of the Republic of Singapore (no ‘Singapore’, http://www.eia.gov/countries/cab. date), ‘Drainage’, http://www.pub.gov.sg/general/ cfm?fips=SN (accessed 14 November 2013). drainageworks/pages/default.aspx?print2=yes 237. ‘Singapore’s next challenge: ‘Treating more seawater (accessed 14 November 2013). with less energy’’, The Straits Times, 23 March 2012, 222. See p. 58 of endnote 10. http://wildsingaporenews.blogspot.hk/2013/03/ spores-next-challenge-treating-more.html#. 223. See pp. 35-59 of endnote 10. Uh1Wf5LfAgN (accessed 14 November 2013). 224. Educational visits to water treatment works: Water 238. Energy Market Authority of the Republic of Supplies Department of the HKSAR Government Singapore, ‘Media Releases: LNG Terminal will (2013), ‘Educational visits to water treatment works Diversify Energy Sources and Enhance Singapore’s by schools or groups’, http://www.wsd.gov.hk/en/ Energy Security’, 13 February 2012, http://www.ema. education/educational_visits_to_water_treatment_ gov.sg/news/view/301 (accessed 14 November 2013). works/index.html (accessed 14 November 2013). Roving Exhibitions: Water Supplies Department of 239. See endnote 84. the HKSAR Government (2013), ‘Roving Exhibitions’, 240. ‘Singapore to Focus on Water-Energy http://www.wsd.gov.hk/en/education/roving_ Nexus’, Bloomberg, 21 January 2013, exhibition/index.html (accessed 14 November http://www.Bloombergbriefs.com/files/ 2013). Water resource education centre: Water CleanEnergyCarbonP1_012113.pdf (accessed 10 Supplies Department of the HKSAR Government November 2013). (2013), ‘Water Resources Education Centre’, http:// 241. According to Article 9 of The Constitution of PRC, www.wsd.gov.hk/en/education/water_resources_ all mineral resources, waters, forests, mountains, education_centre/index.html (accessed 14 November grassland, unreclaimed land, beaches and other 2013). natural resources are owned by the state, that is, by 225. See pp. 118-119 of endnote 10. the whole people, with the exception of the forests, 226. See endnote 85. mountains, grasslands, unreclaimed land and beaches that are owned by collective in accordance with the 227. Audit Commission of the HKSAR Government, law. See the Central People’s Government of the ‘Water Purchased from Guangdong Province’, p. 47, People’s Republic of China (no date), ‘中華人民共和 11 October 1999, http://www.aud.gov.hk/pdf_e/ 國憲法’, http://www.gov.cn/gongbao/content/2004/ e33ch12.pdf (accessed 7 November 2013). content_62714.htm (accessed 10 November 2013). 228. See p. 2 of Lee (2003) in endnote 9. (Chinese only) 229. See p. 16 of Harris (2012) in endnote 40; see also 242. See endnote 119. p. 163 of endnote 10. 243. During the 2009 water shortages in Mainland China, 230. ‘Water self-sufficiency a strategic priority: PM there was strong public opinion in Hong Kong for the Lee’, The Business Times, 6 July 2011, http://www. city to adopt a “good neighbour policy” and draw on asiaone.com/News/AsiaOne+News/Singapore/ its own water supplies before using Guangdong’s. Story/A1Story20110706-287872.html (accessed 12 However, the official line from Guangdong was that, November 2013). while they appreciated the gesture, water imports to Hong Kong would continue as normal. This has led to 231. ‘Singapore to Meet Water Targets Before Deadline: some holding the view that the Central Government Southeast Asia’, Bloomberg, 30 July 2012, http:// was more concerned about the substantial financial www.Bloomberg.com/news/2012-07-29/singapore- sum that Hong Kong pays for its water and that it to-meet-water-target-before-deadline-southeast- wanted to ensure that it would continue to do so. asia.html (accessed 12 November 2013). See Consulate General Hong Kong, ‘Hong Kong Water 232. Tortajada, C., ‘Water Management in Singapore’, Security: Reducing Dependence on Guangdong’, Water Resources Development, vol.22, No.2, Wikileaks, 26 October 2010, http://wikileaks.org/ pp. 227-240, June 2006, http://www.kysq.org/docs/ cable/2010/01/10HONGKONG146.html (accessed 14 Tortajada_2006.pdf (accessed 14 November 2013). November 2013). 233. Embassy of Israel in Singapore, ‘Market Report, 244. See p. 163 of Harris (2012) in endnote 40; see p. 13 of Water/Singapore’, 30 July 2007, https://www.google. endnote 113. com/url?q=http://www.moital.gov.il/NR/rdonlyres/ 245. Peart, M.C. (2004), ‘Water Supply and the BFBADC38-7A0C-4FE8-94D3-2B806DADE98B/0/ Development of Hong Kong’, p. 25, Hong Kong SingaporeWaterMarketReportonlineversion.doc&sa= University, http://hub.hku.hk/handle/10722/159123 U&ei=gvCEUoXoOciV0AXj2oCADA&ved=0CAcQFjAA& (accessed 14 November 2013). client=internal-uds-cse&usg=AFQjCNELzuPQ5EYEZfq 6JSuH8whimY7Bng (accessed 14 November 2013). 246. See p. 163 of Harris (2012) in endnote 40. 234. Economic Development Board of the Republic of 247. Ibid. Singapore (2013), ‘Environment and Water’, http:// 248. See pp. 106 & 167 of endnote 10. www.edb.gov.sg/content/edb/en/industries/

81 249. HKSAR Government, ‘Press releases: LCQ17: Total cent2Fgba1per cent5Ferper cent2Ecfm (accessed 26 Water Management Strategy and related measures’, November 2013). (Chinese only) 17 April 2013, http://www.info.gov.hk/gia/ 264. See endnote 249. general/201304/17/P201304170456.htm (accessed 10 November 2013). 265. Drainage Services Department of the HKSAR Government, Drainage Master Planning, 26 August 250. Water Supplies Department of the HKSAR 2013, http://www.dsd.gov.hk/EN/Flood_Prevention/ Government (2013), ‘Examination of Estimates of Long_Term_Improvement_Measures/index.html Expenditure 2012-2013 & 2013-2014, Controlling (accessed 26 November 2013). Officers Written Reply to Initial Questions, DEVB(W)076’, year 2012 to 2013 & 2013 to 2014, 266. See endnote 42. http://www.wsd.gov.hk/filemanager/en/share/ 267. See p. 29 of endnote 61. pdf/sfc_e_2012-13.pdf & http://www.wsd.gov. 268. Television Broadcasts Limited (2013), ‘新聞透視— hk/filemanager/en/share/pdf/sfc_e_2013-14.pdf 飲水思危’, broadcast date: 14 November 2013, (accessed 8 November 2013); HKSAR Government, http://programme.tvb.com/news/newsmagazine/ ‘Press releases: LCQ14: Seawater Desalination episode/20131114/ (accessed 20 November 2013). Technology’, 22 May 2013, http://www.info.gov. hk/gia/general/201305/22/P201305220523.htm 269. Innovation and Technology Commission of the (accessed 8 November 2013). HKSAR Government (2013), ‘Our Mission’, http:// www.itc.gov.hk/en/about/mission.htm (accessed 24 251. See Lee (2003) in endnote 9. December 2013). 252. Swatuk, L. (2008), ‘A Political Economy of Water 270. Innovation and Technology Commission of the in Southern Africa’, Water Alternatives 1(1): 24-47, HKSAR Government (2013), ‘About Innovation and University of Waterloo, Canada, http://www.water- Technology Fund’, http://www.itf.gov.hk/l-eng/ alternatives.org (accessed 20 November 2013). about.asp (accessed 15 November 2013). 253. Dongjiang River Basin Management Bureau, ‘東江 271. Liu calculated according to data retrieved from ITC’s 流域水資源情況’, 5 December 2007, http://www. statistic page: ‘Innovation and Technology Fund djriver.cn/News_View.asp?NewsID=42 (accessed 10 Distribution of Approved Projects among Different November 2013). (Chinese only) Industrial Sectors’, http://www.itf.gov.hk/l-eng/ 254. Legislative Council Panel on Development of the StatView104.asp (accessed 15 November 2013). HKSAR Government (2011), ‘Minutes of meeting’, LC 272. See endnote 204. Paper No. CB(1)600/11-12, http://www.legco.gov.hk/ yr11-12/english/panels/dev/minutes/dev20111025. 273. See endnote 271. pdf (accessed 15 November 2013). 274. Nakamura, T. (2011), Living on the Edge: Hilltop-to- 255. Ibid. Ocean (H2O) Management in Coastal Cities, UNEP, http://www.worldwaterweek.org/documents/ 256. ‘The coming water wars’, The Washington Times, 8 WWW_PDF/2011/Wednesday/T4/Living-on-the- October 2013, http://www.washingtontimes.com/ Edge-Management-in-Coastal-Cities/Living-on-the- news/2013/oct/8/the-coming-water-wars/?page=all edge-Hilltops-2-Oceans.pdf (accessed 16 November, (accessed 15 November 2013). 2013). 257. Calculated by Su Liu from data provided in the 275. The Central People’s Government of the People’s 2000 to 2012 Annual Reports of the Water Supplies Republic Of China (2010), ‘國家人口計生委關於加強 Department. 泛珠三角地區人口和計劃生育區域協作的意見, 國發 258. Liu, S., ‘Giant on the edge of a precipice: the PRD by (2010)41號’, http://www.gov.cn/gzdt/2010-07/12/ 2020’, CleanBiz.Asia, 1 November 2012, http://www. content_1651891.htm (accessed 26 November 2013). cleanbiz.asia/blogs/giant-edge-precipice-prd-2020 (Chinese only) (accessed 9 November 2013). 276. According to the definition from China Marine 259. See endnote 80. Statistical Yearbook, “coastal city” refers to 260. Water Supplies Department of HKSAR Government municipal city or prefecture (including all districts, (2012), ‘Director’s Statement’, Annual Report counties, and county-level cities) that has coast line. 2011/12, pp. 11-12, http://www.wsd.gov.hk/ Hudongbaike (no date), ‘沿海城市’, Baike.com, http:// filemanager/common/annual_report/2011_12/pdf/ www.baike.com/wiki/per centE6per centB2per 05.pdf (accessed 14 November 2013). centBFper centE6per centB5per centB7per centE5per cent9Fper cent8Eper centE5per centB8per cent82 261. Ibid. (accessed 27 December 2013). 262. Council for Sustainable Development of the HKSAR 277. Zhuhai, Shenzhen, Guangzhou, Jiangmen, Zhongshan, Government (2012), Total Water Management, SDC Huizhou, Hong Kong and Macao. State Bureau Paper No. 03/12, http://www.susdev.gov.hk/html/en/ of Oceanic Administration (2012), ‘Population of council/Paper03-12e.pdf (accessed 14 November 2013). Coastal Cities, 2010’, Chapter 10 to 17, China Marine 263. ‘水塘滿 8年倒水值11億 今年排水接近海水化淡廠 Statistical Yearbook 2012, pp. 242-244, China Ocean 年產量’, Mingpao, 25 November 2013, http:// Press. premium.mingpao.com/cfm/mem_Login1. 278. People’s Government of Guangdong Province (2011), cfm?SuccessUrl=per cent2Fcfmper cent2FContentper ‘廣東概況 – 珠江三角洲地區’, http://www.gd.gov. cent5FNewsper cent2Ecfmper cent3FChannelper cn/govinc/nj2010/01qsgk/010202.htm (accessed 26 cent3Dgbper cent26Pathper cent3D67237957502per November 2013). (Chinese only)

82 279. Summing up the population of the cities of that year. 298. ‘李克強簽署《城鎮排水與污水處理條例》’, Asia Pacific World Health Organization (2010), ‘Macao(China)’, Daily, re-direct from Xinhuanet, 16 October 2013, http://www.wpro.who.int/countries/mac/en/ http://www.apdnews.com/news/38312.html (accessed 28 November 2013); HKSAR Government (accessed 30 November 2013). (Chinese only) (2013), ‘Hong Kong: The Facts’, http://www.gov.hk/ 299. For example, Macau has set a goal to supply 10 per en/about/abouthk/factsheets/docs/population.pdf cent of its consumption from reclamation by 2022 (accessed 28 November 2013); see also endnote 277. (see 澳門特別行政區推動構建節水型社會工作小組 280. National Bureau of Statistics of China, ‘2010年 (2013), 澳門再生水發展規劃(2013-2022)諮詢文本, p.8, 第六次全國人口普查主要數據公報（第1號）’, 28 http://www.marine.gov.mo/waterconservation/ April 2011, http://www.stats.gov.cn/tjfx/jdfx/ pdfs/recycledWaterPlan.pdf, accessed 26 November t20110428_402722253.htm (accessed 26 November 2013, Chinese only). Shenzhen’s use of reclaimed 2013). (Chinese only) water has progressed rapidly – 35 per cent of 281. See endnote 277. consumption is reclaimed, an annual total of 646 million m3. Beijing’s reclaimed water utilisation rate 282. Bureau of Statistics of Guangdong Province (2013), is 50 per cent, Tianjin is 30 per cent, and Qingdao’s is ‘Permanent Population at the Year-End by City’, 25 per cent (‘深圳再生水年利用量已達6.46億立方米’, Section 4-5, Guangdong Statistical Yearbook 2013, pp. sznews.com, 11 May 2013, http://www.sznews.com/ 103, China Statistics Press. news/content/2013-05/11/content_8037251.html, 283. See endnote 277. accessed 2 January 2014, Chinese only). 284. See endnote 282. 300. ‘中國5,000億污水處理投資打水80per cent污泥未處 理’, Tencent Finance, 22 July 2013, http://finance. 285. See endnote 277. qq.com/a/20130722/016661_all.htm (accessed 26 286. ‘中國設市城市數量達657個’, Xinhuanet, 16 June 2011, November 2013). http://news.xinhuanet.com/local/2011-06/ 301. ‘ADB Lends China $240 Million for Wastewater 16/c_121545801.htm (accessed 26 November 2013). Reuse’, Singapore International Water Week, 21 (Chinese only) November 2013, http://www.siww.com.sg/ind240- 287. See endnote 277. million-wastewater-reuse (accessed 26 November 288. See endnote 280. 2013). 289. Loosdrecht, M.V. et al., ‘A source for toilet flushing 302. Economic Development Board of the Republic of and for cooling, sewage treatment benefits, and Singapore, 27 May 2013. phosphorus recovery: direct use of seawater in 303. Drainage Services Department of the HKSAR an age of rapid urbanization’, WATER21, pp. 17-18, Government (2013), Annual Report 2011-12, http:// October 2012. www.dsd.gov.hk/EN/Files/annual_reports/1112/en/ 290. World Bank (2009), Addressing China’s Water sewage_treatment.html (accessed 26 November Scarcity. Recommendations for Selected Water 2013). Resource Management Issues, The World Bank, 304. Environment Protection Department of the HKSAR http://www-wds.worldbank.org/external/default/ Government (2013), ‘Cleaner Production Partnership WDSContentServer/WDSP/IB/2009/01/14/000333 Programme’, http://www.cleanerproduction.hk/ 037_20090114011126/Rendered/PDF/471110PUB en_project2a.asp (accessed 20 November 2013). 0CHA0101OFFICIAL0USE0ONLY1.pdf (accessed 26 November 2013). 291. See endnote 289. 292. Ibid. 293. The State Council of the People’s Republic of China (2013), ‘國務院辦公廳關於做好城市排水防澇設施建設 工作的通知’, 國辦發(2013)23號, http://www.gov.cn/ zwgk/2013-04/01/content_2367368.htm (accessed 26 November 2013). 294. Organisation for Economic Co-operation and Development (2009), Alternative Ways of Providing Water Emerging Options and Their Policy Implications, http://www.oecd.org/env/resources/42349741.pdf (accessed 26 November 2013). 295. See endnote 206. 296. Laughlin, J. (2013), ‘Water Market Continues Growth Despite Global Recession’, WaterWorld, http://www. waterworld.com/articles/wwi/print/volume-24/ issue-6/regulars/perspective/water-market- continues.html (accessed 30 November 2013). 297. Ibid.

83 © Civic Exchange, January 2014 The views expressed in this paper are those of the authors and do not necessarily represent the views of Civic Exchange and the Noble Group.

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