Hong Kong and Guangdong have signed a new agreement for the supply of Dongjiang water to the city, guaranteeing a stable yet flexible supply until 2011.

Secretary for Development Carrie Lam signed the agreement with Guangdong's Department of Water Resources Director General Huang Boqing in Shenzhen today.

There will be flexibility in the daily supply rate to tie in with local seasonal fluctuations, enabling Hong Kong to have better control of the storage level in reservoirs, minimising wastage and saving pumping costs. This will also cater for Hong Kong's needs even under extreme drought conditions with a return period of one in 100 years.

The bureau said the city will pay fixed lump sums of $2.959 billion for next year, $3.146 billion for 2010 and $3.344 billion for 2011, adding the increases reflect the renminbi's appreciation against the Hong Kong dollar and inflation over the last three years.

It noted the increased purchase costs of Dongjiang water will not have an immediate impact on water charges as the Government has frozen the fees for 2008-09 and 2009-10 to help the community cope with inflation.

Meanwhile, both sides also reviewed the Dongjiang water-quality monitoring work, and the progress of projects Guangdong has undertaken to enhance water quality and tackle water pollution.