CONSUMERS in Selangor, Kuala Lumpur and Putrajaya may have to pay up to 45% more for water next year under a proposal submitted to the authorities as part of a plan to modernise the water supply systems in the state and the two federal territories.
An industry source said the proposal was submitted by Syarikat Bekalan Air Selangor Bhd (Syabas), which is set to take over the operations of Perbadanan Urus Air Selangor Bhd.
Syabas is 70% owned by Puncak Niaga Holdings Bhd and 30% by the Selangor Government while the Federal Government holds a golden share.
Under the same proposal, water rates would be due for another round of increase of about 40% after 2008 as the Selangor Government ploughs in more money to modernise the state's water supply network,
The proposal now requires approval from the newly created Energy, Water and Communictions Ministry before a final decision by by the Cabinet.
It (a tariff increase) is inevitable but the quantum and the time frame have not been decided, said the industry source.
Consumers in Selangor currently pay about 90 sen per cubic metre for fresh water.
The rates in other states vary from as low as 30 sen in Penang to RM1.33 in Johor.
The industry source said water tariffs had not been reviewed in Selangor since 2001 and the proposed new rate would be similar to that in Johor, where the rate was reviewed last year.
The matter is quite urgent. We either live with poor water quality or make the necessary investment in the new few years to ensure a better quality of water for the state, he added.
Analysts said despite the spectre of higher rates in Selangor and the federal territories, Syabas was expected to absorb some of the initial cost related to water pipe replacement.
We have a situation where the pipe network has been neglected for so long that it causes a lot of disruptions to water supply as well as a high incidence of non-revenue water (NRW), an analyst said, adding that the NRW rate in Selangor was currently believed to exceed 40%.
Syabas would likely incur losses in the first few years unless the water tariff was revised, another analyst said. - By Sidek Kamiso