To achieve marine and fresh water quality objectives that will safeguard the health and welfare of the community and meet various conservation goals, by planning for the provision of sewage facilities, intervening in the planning process and enforcing the controls in the Water Pollution Control Ordinance and the Dumping At Sea Ordinance.
Announced a proposal to increase sewage charges under the polluter pays principle, to provide sustainable financial support for the operation of the Harbour Area Treatment Scheme (HATS) Stage 2A and other sewerage facilities.
Commenced planning, investigation and design work for the tunnel system for HATS Stage 2A.
Commissioned an advanced treatment plant for a demonstration scheme on reclaimed water uses in North District and started supplying reclaimed water to selected users.
Issued a Guidance Note on the "Implementation of the 1996 Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter, 1972".
The future of Victoria Harbour, the heart of Hong Kong, is about to reach a milestone. After years of debating how best to create a healthier, safer water environment, the discussion has now come down to dollars and cents. The Government is seeking to implement the polluter pays principle in full to cover the operating costs of sewage collection and treatment. That means every household in Hong Kong would be expected to contribute more. In 2006 the way was smoothed for the community to make an informed decision on whether they are willing to invest in the harbour's future.
Legislation to ramp up sewage charges over ten years has been prepared, which, it is hoped, will be passed by the Legislative Council and come into effect in 2008. If the higher charges are accepted, the Government will be able to press ahead with the next phase (Stage 2A) of the Harbour Area Treatment Scheme (HATS), which would maintain and enhance the improvements already achieved by Stage 1. The construction of Stage 2A would achieve water quality that is healthy enough to sustain more abundant and diverse marine life, make Tsuen Wan's beaches safe for swimming and even allow the cross-harbour swim to resume on environmental grounds. On the other hand, if higher sewage charges are rejected, the consequences would be grim. Water quality would deteriorate in the long term and the pollution problems that develop would be even more expensive to fix in future.
Swimmers will welcome the challenge of taking part in the cross-harbour swim in Victoria Harbour when it is resumed.
Victoria Harbour's water quality problems stem from a past when Hong Kong's population and sewage flows were much lighter. For years sewage was dumped untreated into the harbour and flushed away by tidal currents. This approach more or less worked until the early 1980s, when the growth in Hong Kong's population and economic activity created sewage loads that were well beyond the harbour's capacity to absorb. In 1989 the Environmental Protection Department (EPD) unveiled a strategic sewage scheme to address the problem. In 2001 this scheme became known as HATS.

Stage 1 of HATS involves collecting sewage from Kowloon and northeast Hong Kong Island and transporting it to a sewage treatment works on Stonecutters Island for chemically enhanced primary treatment. It was commissioned in late 2001, with immediate positive results. Substantial decreases have been recorded in ammonia, E.coli, total inorganic nitrogen and phosphorus. Dissolved oxygen, which is essential to marine life, has increased ten per cent overall. Compliance with the harbour's Water Quality Objectives was 90 per cent in 2006 as against 50 per cent in 2001. However, some problems remain or have worsened.
Map showing the Water Quality Objective (WQO) compliance rates in 2001 and 2006, before and after the commissioning of HATS Stage 1.
Stage 1 treats 75 per cent of sewage flows around Victoria Harbour. The remaining 25 per cent, generated by about one million people living on the north and west of Hong Kong Island, is still going into the harbour untreated. Furthermore, the treated effluent from Stonecutters is not disinfected, resulting in a concentration of bacteria in the western waters. Four beaches in Tsuen Wan have had to be closed on health grounds, in addition to the three that were already closed because of local pollution.
Lido Beach in Tsuen Wan has been closed due to pollution.
Stage 2 will provide a solution by collecting sewage from Hong Kong Island for treatment, disinfecting all the treated effluent and, eventually, providing a higher level of treatment. The proposal for Stage 2 emerged from a report by an International Review Panel in 2000 on the best options for future sewage treatment in the harbour. It received widespread public support in 2004 and, in 2005, a green light from the Chief Executive in Council – provided the public agreed to help fund it. Stage 2 will be much more expensive to build and operate, and a fairer, more sustainable funding arrangement must be achieved.
Cost estimates of HATS Stage 2
  Capital Cost
($billion)		 Annual Operating
Cost ($million)
Stage 2A 8.0 420
Stage 2B 10.8 700
Stage 2 Total 18.8 1,120
Stage 2 has been divided into two phases to make it more manageable and affordable. Stage 2A would collect the rest of Hong Kong Island's sewage and disinfect the treated effluent from Stonecutters. It will cost $8 billion in capital costs and $420 million in annual operating costs. It could be commissioned in 2014 provided the proposed sewage charge increases are approved by the legislature. Stage 2B would cost $10.8 billion to build and $700 million a year to operate, and would introduce a higher level of treatment (biological treatment) and address future sewage loads. However, several uncertainties could affect its timing including future population growth and sewage flow build-up, as well as the need to sort out some complex land issues at the site earmarked for its development. The timing of Stage 2B will therefore be reviewed in 2010-11 taking into account the latest relevant trends in pollution load and water quality. The Government is willing to pay the capital costs for HATS and other sewerage programmes as its contribution to a cleaner harbour (see box on Investment in Sewerage). However, it already spends almost $500 million a year subsidising on-going sewage services. The proposed expansion and upgrading under Stage 2 will mean substantially higher operating costs and the Government's subsidy will become unsustainable unless everyone is prepared to pay their fair share.
The Government is taking the polluter pays principle as its starting point. This requires anyone who pollutes to help cover the expense of cleaning up their pollution. The first step towards implementing the polluter pays principle was taken in 1995 when sewage charges were introduced. However, these covered only a portion of the operating costs and over the years they have never been increased despite improved services requiring higher expenditure. In 2006-07 household sewage charges met only 54 per cent of the cost of treating their sewage. By 2016-17, they will meet only 33 per cent of expenses unless charges are increased. Rather than moving closer to a sustainable approach based on the polluter pays principle, Hong Kong would be moving further away from it.

The situation for higher-strength industrial effluent is somewhat better, with 83 per cent of treatment costs being recovered through the Trade Effluent Surcharge (TES). This is also being reviewed in light of the polluter pays principle and pollution control measures undertaken by operators. However, industry accounts for only around one fifth of the sewage loads. The bulk comes from households and it is here that the Government wants to rationalise sewage charges first.
The Government's long-term goal is to achieve full recovery of operating costs from users of the sewage system. However, it recognises this would be a drastic step to take overnight. Instead, a proposal has been made for modest, gradual increases in sewage charges so that by 2016-17 they would meet about 80 per cent of the operating costs of HATS Stages 1 and 2A and other sewerage facilities. The average household would generally pay $1- $2 more per month each year, over ten years, rising from about $11 a month in 2006-07 to $27 a month in 2016-17, a sum that is expected to be affordable even to lower income families. Moreover, it still places Hong Kong at the low end of sewage charges among other developed economies. Comprehensive Social Security Allowance (CSSA) scheme recipients are safeguarded as they are entitled to an allowance covering the sewage charge.
Projected household monthly sewage charges in 2016-17
A proposal to enact legislation setting out the future sewage charges was announced in December 2006 and it is hoped legislators will pass the revised charges into law before the summer of 2007. There has already been a good deal of discussion about sewage charges and HATS Stage 2, and many of the outstanding issues have been or will soon be resolved. The single most important matter in front of us is to agree on the financing of sewage services.

An early agreement on sewage charges will enable work to proceed on Stage 2A. The programme calls for early introduction of disinfection facilities pending the outcome of an environmental impact assessment (see box on Disinfecting Treated Sewage), which would mean the possibility of re-opening some of Tsuen Wan's beaches soon after commissioning of the facility in 2009. Just as importantly, higher sewage charges would send the message that every single individual is expected to recognise and accept their responsibility for dealing with pollution.
With our sewerage programme implemented, our waters will support water sports like these everywhere.
Seek legislative approval for modest and gradual increases in sewage charges to provide sustainable financial support for the operation of HATS Stage 2A and other sewerage facilities.
Complete effluent quality surveys for the 30 trades paying the TES, with a view to reviewing the TES rates in 2008.
Complete an environmental impact assessment of the disinfection facility for HATS Stage 2A.
Seek funding approval for the disinfection facility and for planning and design work to upgrade the Stonecutters Island Sewage Treatment Works and preliminary treatment works.
Continue monitoring the planning parameters for HATS Stage 2B.
Commence sewerage upgrading works in Sha Tin and village sewerage works at Ting Kau, Sham Tseng, Tsing Lung Tau, Sai Kung and North District.
Start a consultancy to review the sewerage master plans for West Kowloon, Kwai Chung, and Tsuen Wan.
Complete village sewerage works at Ta Kwu Ling.