Circular of the State Development and Reform Commission and the Ministry of Water Resources regarding the Issuance of Measures for Price Administration of Water Supply of Water Engineering

Circular of the State Development and Reform Commission and the Ministry of Water Resources regarding the Issuance of Measures for Price Administration of Water Supply of Water Engineering

Order of the State Development and Reform Commission and the Ministry of Water Resources [2003] No.4

July 3, 2003

Chapter I General Provisions

Article 1 In order to perfect the mechanism of price formation of water supply of water engineering, to regulate the price management of water supply of water engineering, to safeguard and rationally utilize water resources, to promote economical use of water, and to guarantee the sound development of water conservancy causes, these Measures are formulated in accordance with the Pricing Law of the People's Republic of China and the Water Law of the People's Republic of China.

Article 2 These Measures shall be applicable to the price management of water supply of water engineering in the territory of the PRC.

Article 3 The price of water supply of water engineering herein refers to the price of natural water sold to users by water suppliers through blocking, reservation, conduct and taking facilities of water engineering.

Article 4 The price of water supply of water engineering is composed of costs, expenses, profits and tax of the water production.
Costs of the water production refer to the direct salary, direct material expenses and other direct expenditures, as well as depreciation expenses of fixed assets, repair fees and water resources fees production expenses occurred during regular production of water supply. Expenses of the water production refer to rational marketing expenses, management fees and financial expenses in order to organize and manage the production and operation of water supply.
Profits refer to the reasonable revenues acquired through regular production and operation of water supply, and shall be verified according to the profit margin of net assets. Tax refers to the amount of tax which shall be paid by water suppliers in accordance with the State's tax law and shall be included in water price.

Article 5 The uniform policies and management by level and the government-guided price or the government pricing in consideration of different circumstances shall be adopted in the price of water supply of water engineering. The government-guided price shall be applied to the water supply of water engineering run by the local people encouraged by the government and the government pricing shall be applied to other water supply of water engineering shall adopt.

Chapter II Principles and Measures for Verification of Water Price

Article 6 The price of water supply of water engineering shall be formulated in accordance with the principles of compensatory cost, reasonable revenues, high quality and favorable price and fair burden, and shall be adjusted pursuant to the changes of the costs, expenses and market supply and demand of water supply.

Article 7 For the water engineering in the same area of water supply of similar engineering status, geographical environment and water resources, the price of water supply shall be uniformly verified in accordance with the region where it is located.
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