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Published: Tuesday April 15, 2014 MYT 12:00:00 AM
Updated: Tuesday April 15, 2014 MYT 1:32:27 PM

Factories: There is 'cost' for concern

PETALING JAYA: Industries in Selangor are certain to be badly hit by soaring costs should they be subjected to water rationing too, according to the Federation of Malaysian Manufacturers.

If companies in the state face water shortage, they will need to source for alternative supply.

“And, that can be very expensive,” said FMM president Datuk Saw Choo Boon.

Citing an example, he said a food and beverage company based in Shah Alam would require alternative supply amounting to about 120 tankers of water a day.

“Syabas (Syarikat Bekalan Air Selangor) is charging RM100 testing fee on top of RM60 for water in tankers per trip. Therefore, this company will need to pay about RM150,000 a day for supply.

“If they do not get the supply, they stand to lose about RM15mil a day in costs and sales as production will be stopped because of water shortage,” he added in a statement.

FMM’s Selangor branch had held discussions with the National Water Services Commission, which agreed to postpone water rationing for selected industrial areas for the moment.

The federation understood that many investment projects in Selangor and construction projects of Kuala Lumpur City Hall were delayed as Syabas could not guarantee the availability of water for them.

“An electrical products company had to forego a RM40mil order due to uncertainty over water supply, which was diverted to a neighbouring country,” Saw said, adding that the industries’ burden would be lightened if Syabas waived the testing fee for companies.

The industries’ grouses were contained in the FMM’s letter to Prime Minister Datuk Seri Najib Tun Razak on how the water rationing, which has been in effect since February, has affected businesses.

Saw said the Memorandum of Understanding between the federal and state governments to restructure Selangor’s water industry gave “some hope of a long-term solution”.

However, he added, urgent action was needed for a short-term solution as the Langat 2 water treatment plant would only be ready after three years.

“The state government should encourage manufacturers to develop alternative water supply by providing tax incentives for investments in water conservation projects, rainwater harvesting and ground water abstraction,” Saw said.

These should include investment tax allowance and import tax exemption, he added.

FMM also asked the state government to fast track approval for ground water abstraction, and to waive ground water tariff for the first three years.

“They can also charge 2.5 sen per cubic metre for the next three years before reverting to the full rate of 5 sen,” Saw said.

FMM urged suppliers to improve operations and maintenance to avoid prolonged breakdown of equipment at water treatment plants.

It also called for a comprehensive maintenance programme to reduce water leakage, and strict enforcement to prevent pollution of water sources.

Tags / Keywords: Utilities, water, industries, fmm, water shortage, consumers, ppim, nadzim johan, foon weng lian

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