[ is ] “Looking back over the past year, the water supply industry market information, which are mostly found in the system, indicating that the industry is fading out from the perspective of the value of the government, political Perspective.” in 2016 the first water summit, senior partner of E20 platform environment, China water Alliance chairman, president E20 Institute Fu Tao pointed out that the current dilemma facing the water supply industry. He spoke from the water supply industry pain points, analyze the trend in the external policy environment changing context, the future development of innovative ideas and the water supply industry.
water industry five persistent pain
1. Public services and corporate earnings contradiction
We all know that public service is the responsibility of local enterprises to explore this area, how to do business in the end, in fact, water companies have not reached the 1998 water price control measures are predetermined profit target, there is a great relationship with the system contradictions.
2. The rising cost and price constraints contradiction
before the cost of water has been improving, human capital, capital power are improving, but not very nice price adjustment mechanism. Although the department in charge of the NDRC know the plight facing the industry, but has not been a very clear answer.
3. Investment demand and the problem of insufficient funds
high-speed development of China’s cities, investment inputs and water supply facilities, the transformation of the urban infrastructure of a substantial increase, but our industry financing system, support system and there is no clear, easy financing by borrowing, many companies debt ratio reached seven percent, eighty.
4. Service Status and demands for improvement in contradiction
required standard of services and people is changing. Many people Tixi parties will be able to drink the tap open, direct drinking water tap in China is only a dream, service expectations and existing service system is a contradiction.
5. The restructuring and development of institutional constraints contradiction
industry market-oriented process, many water companies surging. After 2000, the North controlled, such as water faucet first continuous layout, there are many private enterprises have been rapid development, but only a few of the water supply industry Water Division achieved mixed ownership stake in reform, most of the enterprises are firmly system bondage, which is in fact contradictoryHe has been plaguing the industry.
Today’s discussion is about the contradictions existing industry, looking for possible breakthroughs and solutions. But before discussing these issues, let’s forget about the concerns and see what is the nature of our industry sector. Three cognitive
1. The public nature
Water is the most basic public services, importance, irreplaceable is ranked in all public services most front.
2. Municipal property
water supply industry is the industry representative municipal public facilities, local people’s governments as the main responsibility, destined to be the geographical split, unlike the power industry and railway industry is a national public facilities, but belong to the state monopolies. Against this background is the local municipal powers, the responsibility is decentralized, fragmented services.
water supply industry is actually a business nature, is operating fees, managed by the NDRC’s price department, the industry itself is user-oriented direct supply, as opposed to gas , the bus is similar, but with sewage, garbage and other management facilities are different.
The above three properties is the starting point of the water sector reform Here we look at the water supply industry
water supply industry is a traditional industry in many cities have 60 years of history, Beijing, Shanghai and more early. Prior to 2002 the Ministry of Construction to promote the reform of public utilities, water supply industry is not an industry, but the government why the industry became the industry? This process depends on the market, which is gradually outside the public service of process. The government no money, no ability, not enough efficiency to improve their own water services, there will be a market mechanism, the government began to turn into procurement services by the market players to complete specific water services.
So he learned how the water supply industry to industry? Water is the process of industrialization and marketization of public services gradually externalization process. Although since 2002 kicked off, this process has been controversy and hesitation, firmly believe that the views of the party to promote market-oriented, industrial reforms, but some people think it is public utilities, the government should move towards direct provision of services this debate is now largely terminated because termination because “eighteen” in the future, in particular, is the “eighteen Third Plenary session” there is clearly a municipal utility fileBasically take the road of market-oriented strategic judgment. Experts believe that this issue is not currently in doubt and controversy, only around methodological controversy.
The world is changing, China is changing, the industry is changing
External change trend
1. Internet +
is now paid through micro-channel in the country you can purchase medicines abroad, this is very typical of the Internet to life changes. Including the impact of P2P platform, O2O, in fact, development of the Internet so that the original scale of the industry, as well as the laws of the world’s great changes happening.
before many industries is the mass market, but the development of the Internet so that each terminal can independently express their views, so that a small minority of services possible.
What is a niche service? Many people go to Japan to buy the toilet, many small niche market needs to be highlighted. For example, dedicated to neurasthenia used, no sound, urinate will not affect the neurasthenic person to sleep, this is a niche demand public toilet is completely ignored. Development of the Internet can make this niche demand circulation in the world, so that small niche market as possible, while a small minority is highly profitable.
The reason why the water there is no profit, difficult to develop, because we have done a service to the most popular. But we are doing the most basic equalization of public services, nor prevent us from digging water supply demand niche market, we tap the Internet for high-end niche markets possible.
2. Capitalization of development
What is the difference between assets and capital
that? Capital can circulate, a financial asset only investment behavior, only be done in the area. In fact, the water industry is also undergoing a course to become the capital assets, capitalization is a big trend, that is, the value of all the enterprise including human capital are no longer human resources, which have become a capital. Value of water, the value of services, as well as including the “white hot” and other brand value, are likely to be access to capital to capital market recognition. So from the original assets into capital, from the investment business to investment and financing business, our values change, which not only affect the water supply in the industry, but affects the whole society.
is high above the water industry in the past, see the vendor is condescending to see politicsHouse is down, this is our value chain. After entering the ecological society, are all upstream and downstream industry work together to create social value system, water in the chain integration, integration of water conservancy and water supply in the water supply has been difficult to be immune. Here are many water companies are related to sewage, waste water is also related to the raw water, raw water is also related to water supply, many environmental company is not a simple relationship between the company, does not have a separate space, all policies are directed throughout the flood service industries, it is a fusion. There is also a channel integration, we have a variety of social channels, such charges are likely to create new value.
4. Free Trend
cheaper oil prices, steel prices, the price of iron, coal prices are getting cheaper. Telephone charges before a thousand dollars a month, and now a hundred dollars. At present it does not seem to impact the water supply service system, but in the continuous development of service facilities today, it is difficult to imagine the possibility of only concerned with water supply system services, but also to constantly improve the value, it is difficult for us to break. More and more infrastructure to free, public service which may be gradually fall trend. If we want a profit, you can only obtain benefits from another dimension.
Many institutions are turned into platforms, like just sell millet phone, it provides a platform, including Tencent, Ali and Apple, now famous the company is the platform for the development of both trends, we now have the ability to supply the industry, they are also eligible to explore the platform.
industry policy trends
1. The change on the rise
external policies of water supply faced by the industry are changing, formerly ministries policy as a dominant, now the policy of the State Council all to see, however. Two, three years issued by industrial policy than in the past decade, have more than twenty years.
2. The trend to strengthen the administrative law
from the administration, the power of local governments will be put into the cage, and the local government is authorized to direct the main water supply industry, is the party of public services . Its power is changed, no longer as before to command to command, unlike the previous approach to regulation must be changed the water supply industry, has been unable to carry out water supply services by the original logic.
3. Mixed ownership reform start
Mixed Ownership true or false change to and froTechnology, but it is a trend.
water supply at the market level threats
household water purifiers rapid development, further squeeze the room for price increases. Add water to the whole industry, each year 60 billion tons of water supply, 100 billion in cash flow only, is a very small industry, not as half of the water purification industry, it is said to have a water purifier three or four billion. From the income, our income is extremely differentiable. How to break through? Our industry is not without value, but the business model is not good enough, not reasonable to value water services.
water services more and more away from the value of water, the government seems more and more to ignore the value of water services. Recalling last year’s water supply industry market big events, which are mostly found in the system, indicating that we are from the perspective of the value of the government, fade political perspective.
responsibility for water services in Utah, pressures, and now cities are sponges impact on our market, we have so many payment system, the burden even heavier, less the value, but a big responsibility, which is our industry sorrow.
from long-term capital, seemed to fade capital. The face of change, the water supply industry seems a bit to keep up with the times? So where is the future development of Chinese water supply industry?
thinking about the future development of China’s water industry
first, and then think
aspects of the water industry has four characteristics of confusion on the Water property:
[123 ] a. public services
we provide public services for the government, which is the foundation. Faced with the cost of supervision and examination, is the basis of the service is bound to help the government to do things, the government is our master, we are his nanny and housekeeper. Government has a special cost center cost supervision and examination.
commodity pricing water according to supply and demand, the price of water is the price of commodity supply company, if it is true commodity of water, it is supply and demand pricing, according to market pricing. China has not done.
III. Water resources
water systems often call water, water from the pipe to the tap. China’s Water Law agreed, water resources belong to the state.
IV. Water as a carrier of social services
In fact, we are taking the service pricing.
Characteristics of the four postWoven together, puzzled development of this industry.
So what is the nature of the company’s water supply? Our early positioning for the institutions, most of which are now public service enterprises, few become market-oriented company. We in the end is a production of aquatic products companies, or companies providing water services for the community people, or to become a platform for the future of the company, which is we need to discuss.
What is the water services provided? Commodity is water, water service or water service, or providing water as a medium of passage? This need to make a trade-off in nature.
In reality, trapped in the water supply industry labor tragedies.
Similarly a service, complete with hourly workers, with hourly service is provided to pay by the hour. If a service company to complete the service fee by taking effect; if the market commodity purchase a service, goods by supply and demand take charge.
have a service brand, have their own standards, let the government do more standard admiration. Now many officials than we are professional, because we do not move towards specialization. Most of China’s current water companies doing outsourcing services for local governments rather than outsourcing, but did not achieve commercial service. The franchise means “service” instead of “labor”, Chinese universality away from the water.
to do service to professional, branded, water services publish service standards just want to promote standardization, brand water services. There is no standard service sector is sad. There is no standard, is the source of labor service, not professional. Second, thinking of extending water services dimension
recognize the characteristics of the industry, eventually homing to the franchise system has a service system, a standard, do not be satisfied with peace of mind services , but to do professional services.
value-added services. Most of the low-cost low-quality public services is a reality, it is difficult to extricate themselves. Water supply industry, basic services are characterized by the public sector, it can not change the short term. Unless there is a revolutionary subversion, can not do otherwise. As long as public goods, in fact, we are moving toward low-cost competition, including waste incineration and sewage do.
space niche value-added services how much? In fact, water purifier is a representative of bottled water is a representative niche value-added services have a lot of space, but there is no water supply company to dig. Lock the user scope and depthIt is not hard to expand basic services face as much as possible to lock the basis of the range of services, expand value-added services in addition to basic services.
Third, thinking the water supply unit specialized services
It is difficult to make a breakthrough in the overall service as a whole, but water services can be cut into a number of service units, such as business intelligence, equipment warranty services, call center services, etc. these services can go sub-specialized, professional services sub-premise must implement an external service and professionalism by the water company, must break the geographical split. Inter-regional collaboration and specialization capitalized docking. An organization like the “white hot” national branding feasible? Whether the formation of an industry service and standards.
Fourth, thinking the water main industry of the ultimate
“Minister Liu Zhijun ‘proposed high-speed rail business logic, originally from Beijing to Shanghai more than a hundred dollars, has now become more than five hundred dollars, because he had become a general railway high-speed rail, for a line, including our highways, too, national road closed ten dollars a lot of people criticize, but later became a highway, to achieve high-quality at higher prices. The price must be the first after the service break to raise prices, unfortunately we do not have such a strategic industry as rail and road initiatives appear.
Fifth, the supply of capital assets of thinking
In the eyes of the capital, water and environmental protection is the pillar industry of the next 20 years, there is no ceiling industry.
is characteristic of capital flow to the high-profit local
Now the market has changed, especially in China decline in return on assets, the price of water so that the market is likely to get a reflection, water the industry has been unable to ignore the capital of the promoter. Water companies will face financial baptism, are Enlarge financial tiny gap between enterprises. The game is called financial capital, the game is called asset investment.
basis for water supply industry capitalization breakthrough
industry experts believe that the market and enterprises is a destination, since it is home, moving as early as late move. Mixed ownership stake with the team, no matter how hard every fight. Seize every opportunity to reform, with the long-term profitability of the water supply assets. Accelerate the process of capital assets of water supply, water supply industry to break through the institutional dilemma, leading companies in the market mechanism, radiation traditional companies.