18-1-2024 (KUALA LUMPUR) Starting from February 1, Malaysians will experience an increase in the cost of drinking water as the government aims to generate revenue for new water-treatment plants and to address issues with leaky pipes. The tariff hike will impact 11 states in Peninsular Malaysia and the three federal territories.
The National Water Services Commission (Span), a federal agency, announced on January 17 that domestic households would see an average monthly increase of only RM3 (86 Singapore cents) in their water bills. Span also urged water-supply operators in the 11 states to provide rebates for lower-income families.
Water-related matters, such as the management of reservoirs, rivers, and water-treatment plants, are primarily handled by each of the 13 state governments individually. Consequently, water tariffs vary across states.
However, the tariff hike set to take effect on February 1 will exclude the states of Sabah and Sarawak.
Charles Santiago, the chairman of Span, highlighted the challenges faced by the water industry, including aging equipment, infrastructure, and insufficient maintenance. Santiago emphasized the need for significant investment in infrastructure development and urged the federal government to allocate RM10 billion annually over the next three to four years to upgrade the water infrastructure. He believed that such funding would provide the necessary assurance and security for the sector.
In Malaysia, the price of potable water varies among states, with the average tariff for households recorded at RM1.43 per cubic meter as of December 31, 2022. The new water tariff is anticipated to increase by 22 Malaysian sen per cubic meter, averaging at RM1.65 per cubic meter.
Span stated that the adjustment of domestic water tariffs would involve an average increase of 22 sen per cubic meter, and the rates would be reviewed every three years. While some states have not revised their water tariffs for 40 years due to public resistance, Span emphasized that the tariff hike was necessary for the long-term sustainability of the water-supply industry. However, even with the increase, the tariff will not fully cover the actual cost of providing water, which was RM1.75 per cubic meter in 2022.
In response to the announcement, the Penang state government revealed that consumers in the northern state would face a doubling of water prices from February 1, with a new tariff of 50 sen for every cubic meter for the first 20 cubic meters, compared to the current 22 sen. Similarly, Negeri Sembilan stated that consumers in the state using up to 20 cubic meters of water per month would be charged 71 sen per cubic meter, up from the current rate of 55 sen.
Span, along with another federal agency called the Water Asset Management Company, is responsible for overseeing the state water operators in Peninsular Malaysia and the federal territories, as well as the maintenance and construction of water infrastructure.
The intervention by these federal agencies aims to alleviate the perpetual shortage of funds faced by state governments to maintain or construct new water-treatment plants, expand reservoirs, and repair aging underground pipes. Malaysia’s Natural Resources and Environmental Sustainability Minister, Nik Nazmi Nik Ahmad, stated in November that nearly all water-supply companies were operating at a loss.
According to Span, some water pipelines in Peninsular Malaysia date back to the British colonial era, with approximately 39,000 kilometers of asbestos cement water pipes requiring urgent replacement.
Moreover, an alarming 37% of the country’s water is classified as non-revenue water, referring to potable water that either leaks into the ground or is stolen. Additionally, 90 out of 340 water-treatment plants are operating beyond their capacity.
Approximately 85% of Malaysia’s water supply comes from rivers, prompting the need to transition towards reclaimed water, according to Santiago. He noted that water consumption in Malaysia is high, with an average of 230 liters per day compared to 160 liters in Singapore, primarily due to the low cost of water, which encourages wastage.
