Because of an over-estimation of the revenue from sewage charges, the trading fund incurred a huge deficit
after its first year of operation. In 1996, the Drainage Services Department then proposed significant increases
in sewage charges for the fund to break even. The proposed rate of increase between 1997 and 2000 amounts
to 165%. This increase in sewage charges was blocked by all political parties. In September 1997, the Government decided to close the fund in April 1998 and return to the old system of using tax revenue to subsidize sewage services. Based on this unsuccessful experience of the sewage services trading fund, there is some doubt as to whether a trading fund arrangement is able to solve the problems facing the water supply industry. matching its service levels against consumer demand.