Latest principles for calculation of water prices in Vietnam

Latest principles for calculation of water prices in Vietnam (Internet image) 

Regarding this issue, LawNet answers as follows:

1. Latest principles for calculation of water prices in Vietnam

According to Article 51 of Decree 117/2007/ND-CP (amended in Decree 124/2011/ND-CP), the principles for calculation of water prices include:

- Clean water prices must be calculated accurately and fully the rational cost factors of production in the process of production and distribution of clean water (including the cost of maintaining connections) to ensure the legitimate rights and interests of units of water supply and water-users

- Ensuring the rights to self-decision on water purchase and sale prices within the price brackets set by the State.

- Clean water prices must ensure that water supply units can maintain, develop and raise the quality of services and contribute to the thrifty use of water, taking into account support for the poor.

- Clean water prices are determined in suitability to water sources, water production conditions of each region, each locality, each zone.

- Clean water prices are determined regardless of users being domestic or foreign organizations or individuals.

- Implementing the mechanism of reasonable price subsidies between groups of customers with different use purposes, gradually reducing and proceeding to eliminate the cross-subsidy between prices of water used for daily-life activities and prices of water used for other purposes, contributing to boosting production and increasing the competitiveness of water supply units.

- Local administrations at all levels, organizations and individuals engaged in water supply activities must work out programs against the loss of water and water charges, adopt contracting and rewarding mechanisms while setting the maximum levels of water and water charge loss eligible for inclusion into production costs so as to encourage water supply units to operate with efficiency.

- If the decided clean water prices are lower than the accurately and fully calculated prices of clean water, provincial-level Peoples Committees shall annually consider and allocate the deficit amounts from local budgets in order to ensure the lawful rights and interests of water supply units.

- The Finance Ministry shall assume the prime responsibility for, and coordinate with the Construction Ministry and the Ministry of Agriculture and Rural Development in, guiding the principles and methods of determining clean water consumption prices.

2. Regulations on water charge payment in Vietnam

Regulations on Water charge payment according to Article 48 of Decree 117/2007/ND-CP are as follows:

- Water-using customers shall pay in full and on time the water charge amounts stated in bills to water supply units. The payment modes, forms and venues are agreed upon by the two parties in water supply service contracts.

- Water-using customers who pay water charges one month later than the deadlines stated in water supply service contracts shall pay interests on the late-paid sums to water supply units.

- Water supply units that collect excessive water charges shall return the excessive amounts to water-using customers, including the interests on the excessively collected amounts if the money return is made one month after the time the water charges are collected in excess.

- The interests on late-paid amounts or excessively collected sums are agreed upon by the parties in service contracts but must not exceed the highest lending interests of the banks where water supply units opened their accounts as stated in the water supply service contracts at the time of payment.

- Water-using customers may request water supply units to re-examine the payable water charges. Upon receipt of customers requests, water supply units shall settle them within 15 working days. If disagreeing with the settlement by water supply units, water-using customers may request competent agencies or organizations to organize the conciliation.

In case of non-request for conciliation or failed conciliation, water-using customers may initiate lawsuits at court according to provisions of law on civil procedures. Pending the settlement, water-using customers shall still pay water charges and water supply units must not stop providing water supply services.

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