Water tariff: Carry thorough study, avoid spike in rate

SHAH ALAM - The government needs to carry out a thorough study if there is a plan to grant water operators complete control over setting water tariff rates that will affect domestic users in this country.

Pakatan Harapan (PH) Shah Alam Member of Parliament Azli Yusof said the detailed study was required because water was a basic requirement that millions of Malaysian residential consumers depend on daily.

Azli said that he personally disagreed with the Natural Resources, Environment and Climate Change (NRECC) ministry proposal, which sought to give business operator complete control over service fees and water tariff rates in the future.

"I also want to ask if the operator has sufficient financial capacity to handle operations and distribution of supplies to millions of domestic consumers without government assistance.

“This is because the cost of raw water processing and treatment is very high.

"The cost becomes higher when combined with maintenance expenses, replacement of old pipes and the construction of new water treatment plants in each state which reach up to billions of ringgits.

"Thus, I see that the proposal needs to be scrutinised by all stakeholders including the federal and state governments involved," he told Sinar Premium on Sunday.

Azli made this statement in response to a report indicating that the government may permit state-level water operators to establish their own water tariff-setting processes without requiring permission from the federal level.

Prior to this, NRECC Minister Nik Nazmi Nik Ahmad said that the action was taken in response to concerns from water operators who claimed that they were being burdened with maintenance costs because the current rate for non-commercial use had not been raised in nearly 40 years.

However, previously, the Perikatan Nasional (PN) government agreed to maintain water supply tariffs for the domestic category (residential premises) in Peninsular Malaysia and the Federal Territory (WP) of Labuan following the increase in the cost of living that the people were facing.

Additionally, the ministerial meeting on June 22, 2022, decided on the implementation of the adjustment of water supply tariffs for non-domestic categories and special categories in Peninsular Malaysia and WP Labuan with effect from Aug 1, 2022, involving an average increase of 25 cents per cubic meter.

The move was taken following the decision of the ministerial meeting which agreed to the use of the Tariff Setting Mechanism (TSM) instrument in reorganising the management of the national water supply.

Azli added that he also did not rule out the possibility that the water tariff rate would rise sharply if the government gave full authority to operators to determine the appropriate tariff rate.

Therefore, he said, the federal government, the National Water Service Commission (SPAN), operator companies and the state government needed to discuss to achieve a 'win-win' solution in determining the answer to the water supply tariff issue.

In the meantime, Terengganu's Tourism, Culture, Environment and Climate Change Committee chairman Datuk Razali Idris said the state government welcomed the ministry's proposal to introduce a mechanism for setting water supply tariffs.

He claimed that the state government might also support the increase in water tariffs in Terengganu, but the amount would not burden consumers and industrialists.

"This increase in water tariffs cannot actually be avoided because the increase in the annual operating costs of the water supply industry is not equal to the current tariff rate.

"However, what important is that the state government has its own mechanism for setting water tariffs according to the demand and supply of the people and the industry," he said.

Reform the water management system for the future of the country.

In the meantime, the Malaysian Water Association supported the recommendation that the problem of water resource management be revamped, given priority and at the same time considered as part of the national security issue.

Its president Dr Mohmad Asari Daud said he agreed with the SPAN chairman Charles Santiago’s statement that the government should prioritise the management of water resources through planning to increase resource allocation.

"We agree that with sufficient allocations, significant steps can be taken to reduce NRW (Non-Produced Water), clean rivers and advance the development of important infrastructure.

"The exodus of investment companies from Malaysia due to the lack of water signals a critical call to action," he said in a statement on Saturday.

Malaysian Water Association also emphasised SPAN Chairman's statement that the involvement of private sector was crucial to achieve collective success.

He said by leveraging innovative practices such as surface water harvesting, water reclamation and efficient use of water gadgets as well as water reuse and recycling, the pressing challenges relating to water resources could be addressed.

"Malaysian Water Association is committed to working with SPAN and private partners to change the water management system to ensure the sustainability and future security of the country's water resources.

"We also urge all stakeholders to unite in efforts to protect water resources for the prosperity and well-being of the country," he said.