Adjusting clean water prices: Aiming for appropriate pricing level

For over a decade, Dong Nai has maintained a fixed clean water price. While this has benefited consumers, water supply enterprises are facing significant hurdles in reinvesting and expanding their networks, particularly in rural areas. 

People in Dau Giay commune, Dong Nai province, use clean water from a centralized surface water supply system.

Given this reality, many units have petitioned the province to adjust water prices to reflect the new situation.

A decade of "frozen" water prices

According to Tran Van Nguyen, Director of Dong Nai Water Supply JSC (Dowaco), the company is still selling clean water to residents under Decision No. 20/2014/QD-UBND issued on May 23, 2014. After more than 10 years, while electricity, labor, materials, and input costs have all increased sharply, maintaining a fixed price has significantly affected production and business efficiency, as well as the ability to reinvest in infrastructure.

Dong Nai Water Supply Joint Stock Company has developed a water price plan in accordance with new regulations and submitted it to the competent authorities for appraisal, but it has not yet been approved. In 2026, alongside the task of ensuring stable and safe water supply for residents and businesses, the unit continues to propose early approval of new water prices; accelerate water source projects, increase plant capacity, expand the network, strengthen loss prevention, and apply technology in operation; as well as coordinate with departments and agencies to resolve difficulties regarding land, planning, and project progress.

Sharing the same difficulties, a representative of Cau Moi Lake Water Supply Joint Stock Company said: The enterprise still applies the unit price from 2014 of the Provincial People's Committee. With low prices, households use less, and the capital recovery period is prolonged, thereby directly affecting the enterprise's investment motivation. The unit proposes that the province soon consider adjusting the clean water unit price according to current cost levels.

Hoang Anh Tuan, General Director of Gia Tan Water Supply JSC, noted that since 2023, his unit has proposed a flat rate of 10,000 VND per m3 (eliminating the progressive pricing tiers). However, the proposal remains under review. Also, according to Tuan, many households with water pipes to their homes have not yet registered them or have registered but not yet used them, causing the enterprise to suffer prolonged losses. Nevertheless, the enterprise still needs to invest in expanding the network to increase the proportion of households with access to clean water, in line with the province's goals.

Dong Nai currently has 19 enterprises investing in the clean water sector. Given the general sharing of units, the water price, which has remained unchanged for over a decade, is no longer suitable for current cost fluctuations and development requirements. Therefore, adjusting water prices at this time is necessary to ensure operational capacity, reinvest in the water supply network, expand the water supply network to rural areas, improve service quality, and meet the increasing needs of the people. At the same time, when water supply infrastructure is strengthened, the percentage of households using clean water from centralized surface water supply systems will increase, and groundwater exploitation will gradually decrease.

In 2014, the Provincial People's Committee issued Decision No. 20/2014/QD-UBND on the price of tap water supply in the province. According to this decision, household customers have 4 price levels, ranging from 5,800 VND/m3 to 12,800 VND/m3, excluding value-added tax. Since then, this price has not been adjusted.

Balancing the interests of businesses and users is necessary

Clean water is an essential service, so price adjustments must ensure a balance of interests between businesses and users. Because if the price is too low, businesses will not have enough resources to upgrade infrastructure, accelerate network expansion, invest in technology, and increase capacity, thereby increasing the percentage of people using clean water. Conversely, if the price is too high, rural residents will not be eager to register for use, reducing the effectiveness of water supply projects.

Vo Van Dinh, Deputy Director of the Department of Agriculture and Environment, said rural clean water prices are formulated in line with guidance from ministries and agencies. However, prices after appraisal are often higher than what rural residents can afford, resulting in a limited number of households registering for the service. Meanwhile, in areas far from the main pipeline where water supply enterprises have not yet invested, many water supply cooperatives have to buy water from enterprises through a master meter and then resell it to residents at prices above the regulatory limit, creating shortcomings.

Dinh added that the current solution is for enterprises to develop appropriate pricing plans that balance interests. The Department of Agriculture and Environment will coordinate with the Department of Construction to conduct appraisals in accordance with Decree No. 85/2024/ND-CP issued on July 10, 2024, by the Government.

Meanwhile, Duong Van Hieu, Deputy Director of the Department of Construction, stated: Under regulations, water prices must be calculated correctly and fully to cover costs. For projects that have not reached their designed capacity, depreciation costs are very high, pushing the cost of clean water up sharply; some proposals put the price at nearly 40,000 VND/m3, exceeding the maximum limit. If approved under the "correct, full" principle, it would be difficult for people to accept; if the price is lowered, it would not comply with regulations and would not cover the operating costs of the water supply unit.

Hieu also added: Currently, there is no consensus on the authority to issue economic-technical norms between urban water (Provincial People's Committee) and rural water (Ministry of Agriculture and Environment), creating many difficulties in establishing clean water prices for each unit. Following the province's directive, in the coming time, the Department of Construction will lead the coordination with the Department of Agriculture and Environment to appraise water pricing plans in accordance with Decree No. 85/2024/ND-CP, aiming for a suitable and feasible price level, supporting enterprises to stabilize operations, and creating conditions for people to access more clean water. 

By Hoang Loc – Translated by Mai Nga, Minho