Done deal: Secretary for the Environment, Transport & Works Dr Sarah Liao signs the new water agreement.

Hong Kong and Guangdong have reached new agreements on the Dongjiang water supply that could save up to $105 million.

The arrangements allow for greater flexibility in the daily supply rate to tie in with seasonal fluctuations in the local yield, thereby minimising wastage and saving pumping costs.

The Environment, Transport & Works Bureau said the new arrangements will guarantee a fully flexible supply of Dongjiang water up to 2008 based on actual need.

The total lump sum payment for 2005 is capped at the 2004 level, $2.53 billion. Annual expenditure in the purchase of Dongjiang water for the three years from 2006 to 2008 will be $2.49 billion, thereby accruing a total potential saving of $105 million.

Long-term supply to Hong Kong to cope with future development under existing agreements will be reassured under the new arrangements, with the ultimate annual supply quantity of 1.1 billion cubic metres to be retained. The target date for achieving this projection will be reviewed.

Guangdong will continue to protect the water environment in the vicinity of Dongjiang and strive to upgrade water quality to comply with the latest national standard. Hong Kong will benefit from reduced expenses in water treatment due to the enhanced quality of Dongjiang water.