Guangdong authorities have requested that quantity and flexible supply arrangements be considered together with the price of Dongjiang water.

Secretary for the Environment, Transport & Works Sarah Liao said the Government will review the annual supply quantities according to the latest estimate of freshwater demand.

"We will also seek to incorporate more flexible provisions into the agreement so that the quantities of raw water imported may be reduced in wet seasons and suitably increased in dry seasons," Dr Liao said.

Responding to a question from Fred Li in the Legislative Council today, she said such provisions can ensure a 24-hour supply of water while reducing the possibility of the overflow of Hong Kong's reservoirs.

Dr Liao said the Government will continue negotiating the price of water with Guangdong authorities.

"However, just as with any other contract, an agreement can only be reached if there is a consensus between the two parties," she said.

Dr Liao said the Government has repeatedly and strongly urged the Guangdong side to lower water prices for 2001-2003 due to deflation on both sides of the boundary.

"However, the Guangdong side requested that the price be raised, believing that the continuous development of the Guangdong economy had led to a corresponding increase in operational costs," she said.

"The Guangdong side also cited the rise in expenditure on water resource protection as a factor of the increase in costs."