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Price regulation is essential

(China Daily)
Updated: 2006-11-15 10:38

The NDRC regulation provides clear-cut accounting standards for water suppliers. It imposes quotas on those costs, which could become uncontrollable if no specific limit is imposed, such as hospitality expenses.

This would prove to be the first workable step for regulators to rein in the costs of public goods suppliers if it can be carried out to the letter.

To ensure the faithful implementation of the rule, independent auditing is indispensable and cost information should be made available to the public. A good regulation alone would not solve all the problems.

If external auditing is not introduced in the cost accounting of water supply firms and their cost information remains off limits to the public, water suppliers would still have much leeway to cheat regulators and the public and manipulate pricing.

If that happened, it would nullify the NDRC regulation. And that is what the public is really concerned about.

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