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Ms. Jingmin Huang, Urban Development Specialist, EASS from ADB discusses how public participation works in the PRC, through the Public Service Price Hearing (also known as, public hearing). It provides a history of the method of public participation in price decision-making of public service, introduced in the country more than 10 years ago as well as the challenges that it faces at present. This presentation will discuss how public hearing works in the PRC using water tariff adjustment as an example.
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Feifei Lu, Jingmin Huang and Wendy Walker
EARD/EASS, ADB
Public participation in water tariff reform in the P.R.C
- Does it work and how?
Agenda
I. Public service price hearing in the P R C
II. Public service price hearing procedure
III. Challenges to public service price hearing
IV. Comparative study- does it work?
V. Conclusions
What is public service price hearing?
What is the purpose of setting up public hearing?
Public service price hearing in the P R C
Public hearing in the P R China
Along with the reform of political system, public participation is being given more attention
not bound in a legal framework (Key issue: accountability)
19 public services, including urban planning, transportation and education are on the list
31
21
0 10 20 30 40
Water tariff
Gas
Urban public transportation
Basic medical service
Wastewater treatment
Cable TV
Compulsory education
Garbage recycling fee
High school & vacational …
Heating service
Entrance fee to major tourist …
Highway public transportation
Toll fee
Funeral and interment service
Parking
Rental of public housing
Property fee
Agricutural water
Local railway ticket
Summary of public hearing list issued by all
provincial level governments in China (2011)
Background
Public service price
hearing in China first
was legislated in 2002
Since 1998, 383
water tariff public
hearings have been
held
Only 4 have rejected
Purpose of public service price hearing
Public Service
Price Hearing
Communication Improve
transparency
Involve public
in decision
making
History of public hearing
2008
Methods of organizing
public hearing for
governments to Make
Prices
2002
Measures for Hearing
on Government-fixed
Price
Public hearing with
rejection right
Government
Decision (No Public
involved )
Phase 1 of public
hearing
Phase 2 of public
hearing
Public hearing with
rejection right
Who can initiate the hearing?
How to select consumer participants?
II. Public Service Price Hearing
Procedure
Public service price hearing procedure
Initiated by price authority (or water company)
Cost evaluation by price authority
Tariff proposals reviewed
Announcement and call for public participants
Records keeping
Need higher level endorsement & approval
Key facts of public hearing process
In the form of a meeting
Tariff invalid without
going through public
hearing
With 25~30
participants
40% of participants are
consumer representatives
III. Challenges to public service
price hearing
Been widely criticized and
disputed by media and
public
Public Service Price Hearing
Raise your hand if you agree
to increase tariff
Challenges to public hearing
Do consumer participants represent the
general public’s opinion?
Is the financial statement available to public?
Is public involved in decision making process?
Challenges to involve public into decision
making
Public hearing setting
- Small number of participants
- Insufficient time to collect feedback
- Happens at late stage in the decision making
Difficult for public to evaluate proposals due to
lack of professional knowledge
Is it possible to reject proposals via public hearing?
What are the impacts of pubic hearings for water
tariff increases and government’s decisions?
IV. Special case and comparative
study
Comparison study of public hearing impact
on water tariff
Harbin
Beijing
Jinan
Nanjing
Shanghai
Wuhan
1992~2001
VS
2002~2011
Comparison study of public hearing impact
on water tariff
The absolute water tariff increase dropped
0.3 0.35 0.22 0.22 0.28 0.2
1.7 1.45 1.68 2.38
1.38 0.9
2
1.4 0.9
0.55
1.14
0.8
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Beijing Harbin Nanjing Jinan Shanghai Wuhan
Water tariff value increase
Before 1992 1992-2001 2002-2011
Comparison study of public hearing impact
on water tariff
Increase percentage dropped significantly
567%
414%
764%
1082%
493% 450%
100% 78% 47% 21% 69% 73%
Beijing Harbin Nanjing Jinan Shanghai Wuhan
Water tariff percentage increase
1992-2001 2002-2011
Comparison study of public hearing impact
on water tariff
Average: 1992-2001: 5.8 times VS 2002-2011: 2.7 times
5
4
9
8
6
3 3
2
3 3 3
2
Beijing Harbin Nanjing Jinan Shanghai Wuhan
Water Tariff Adjusting Times
1992-2001 2002-2011
Recommendations to public hearing in
China
Public Service
Price Hearing
Communication Improve
transparency Involve public in
decision making
Bottom-up
consumer
participants
election process
Public awareness
program
Open background
info of consumer
participants
Open financial
statement
Independent cost
evaluation
Improve
procedure
Explain financial
statement
Public consultation
prior to
implementation
Objective
Recommen
dations
Public hearing has efficiently lowered the water tariff increase by value and times.
A challenge for ADB projects to improve implementation of water tariff reform.
V. Conclusions
