Directive No. 04/2004/CT-TTg On Strengthening Water Supply Management and Clean Water Consumption

DIRECTIVE

ON ENHANCING THE MANAGEMENT OF WATER SUPPLY AND CLEAN WATER CONSUMPTION

Clean water is an essential product and commodity serving production and human needs, and at the same time a national resource. The exploitation and use of water must be economical and reasonable. The State manages clean water through technical standards, environmental regulations, and pricing policies to gradually eliminate state subsidies for capital investment, improve and upgrade urban water supply systems, and create favorable conditions for water supply businesses to operate effectively.

In recent years, there have been positive changes in water supply activities in cities, with water supply systems continuously improving. Most cities and towns now have water supply systems. Many projects funded by government grants, international financial organizations, and domestic funds are being implemented according to the national urban water supply development goals set by the Government until 2020.

However, current water supply activities still face many difficulties and have not met the requirements of industrialization and modernization during the period of renewal, with trends towards regional and international integration. Urban water supply only ensures for about 60% of the urban population with an average consumption of 80-90 liters/person/day. Meanwhile, the rate of water loss and revenue loss remains high, averaging 36%, and in some areas exceeds 45%. The quality of clean water in some places has not reached the prescribed hygiene standards. Planning and plans for protecting and exploiting water sources for urban and industrial use are insufficient and unreasonable, leading to situations where people lack clean water in some areas, while in others, water treatment plants are underutilized. The transition and creation of conditions for water supply businesses to shift from public service operations to commercial operations are slow and face many difficulties.

The main reasons for these issues are: inappropriate management mechanisms and policies for water supply, the continued subsidizing nature of water supply business operations, and their lack of financial autonomy. Additionally, infrastructure overcapacity, the pressure of urban development, rapid population growth, concentrated migration to cities, especially large cities, uncontrolled water source pollution, and the lack of coordinated investment, management, and operation of facilities are significant obstacles to current water supply development. Supervision of localities in establishing and implementing urban water supply planning is limited.

To address these issues and facilitate the development of water supply activities, enabling water supply businesses to operate effectively and meet the demand for residential and production water, the Prime Minister instructs:

1. The Ministry of Construction shall be responsible for:

a) To take the lead and coordinate with relevant ministries and sectors to study and submit to the Prime Minister for approval in the first quarter of 2004 a proposal on "Reforming the organizational model and management mechanism for businesses operating in the water supply sector" aimed at transitioning water supply businesses to effective commercial operations, improving service quality, and avoiding monopolistic and closed-off service practices.

b) By the second quarter of 2004, to study and amend the economic and technical norms for clean water production.

c) By the second quarter of 2004, to take the lead and coordinate with relevant ministries, sectors, and localities to inspect the establishment and implementation of urban water supply planning.

To organize regional and inter-provincial water supply planning; to urge and guide localities in establishing water supply planning and investment development plans, striving to ensure that all Class I and II cities have approved water supply plans by 2005.

To continue directing localities to implement programs to reduce water loss and revenue loss, aiming to decrease the average water loss and revenue loss rate to 30% by 2005.

2. The Ministry of Finance shall be responsible for:

a) By the third quarter of 2004, to issue a framework for clean water consumption prices as a basis for provincial and centrally-administered city People's Committees to establish and issue local clean water consumption prices.

b) To guide the management and implementation of investment capital; to guide, inspect, and urge localities to complete investment settlement reports for water supply projects within their authority; to propose methods to determine the value of fixed assets after investment as a basis for transferring assets to businesses for depreciation, particularly those projects invested before 2000, and report to the Prime Minister in 2004.

c) By the second quarter of 2004, to submit to the Prime Minister financial mechanisms and policies regarding investment construction and management of water supply facilities to create favorable conditions for businesses to operate and encourage various economic components to participate.

d) By the second quarter of 2004, to coordinate with the Ministry of Construction to study and amend Joint Circular No. 03/1999/TTLT-BXD-BVGCP dated June 16, 1999, guiding the method of pricing and decision-making authority for urban and industrial clean water consumption prices, and rural community clusters according to Decree No. 170/2003/NĐ-CP dated December 25, 2003 of the Government detailing the implementation of certain provisions of the Price Ordinance.

3. The Ministry of Planning and Investment shall be responsible:

To take the lead and coordinate with the Ministry of Finance, the Ministry of Construction, and localities to review and assess the effectiveness of investment, supervise investment in water supply projects, and report to the Prime Minister in the second quarter of 2004.

4. Provincial and centrally-administered city People's Committees shall be responsible:

a) In 2004, to direct and organize the establishment of water supply planning and investment development plans in their respective regions; to organize supervision and assessment of investment effectiveness, and to direct the completion of investment capital settlement and the use of investment capital by water supply businesses managed by the locality according to the law.

b) Based on the pricing method and framework for clean water consumption prices, to direct the establishment and determination of local clean water consumption prices according to the principle of accurately and sufficiently covering production costs, ensuring that water supply businesses have the financial capability to operate independently.

c) Implement specific measures to prevent water loss and revenue loss, ensuring compliance with established standards, and strictly manage the technological process and quality of clean water according to prescribed standards. Organize propaganda and mobilization to enhance public awareness and responsibility in protecting water sources, using water efficiently, and fulfilling payment obligations for provided services.

5. Relevant ministries and sectors shall coordinate in implementing their respective functions and responsibilities.

6. The Ministry of Construction shall take the lead, in coordination with the Ministry of Finance and the Ministry of Planning and Investment, to monitor and regularly report to the Prime Minister on the implementation of this Directive./.