Plug the leaks

Malaysia has allowed tariff increases since February, with the increased collections going towards fixing a leaking, polluted water network caused by ageing infrastructure. That explains why water industry vendors are queuing up to sell their wares in Malaysia.— AZMAN GHANI/The Star

THE vast turnout at ASIAWATER 2024 expo and conference (April 23-25) in Kuala Lumpur would have been surprising to an industry outsider. How sexy can the water sector be?

Well, one reason why the conference was packed with exhibitors is because Malaysia “is in play”.

Malaysia has allowed tariff increases since February, with the increased collections going towards fixing a leaking, polluted water network caused by ageing infrastructure.

That explains why water industry vendors are queuing up to sell their wares in Malaysia. The exhibitor hall had a marked presence of China-based companies offering just about every type of solution for the industry.

More importantly, water is an ongoing global crisis, as PwC officials say.

“Globally we are facing a water crisis, which will require a multitude of responses. For governments, this means addressing more specifically the main pillars of climate adaptation, water governance, water quality and water investment,” write Jasmine Voo and Perpetua George from PwC in their op-ed published in this issue.

“For Malaysia, Indonesia and Thailand, it’s concerning that the water infrastructure is inadequate for the population, especially with increased migration from rural to urban zones,” they also say.

Another strong voice in the water sector is Charles Santiago, who became chairman of the National Water Services Commission (SPAN) a year ago.

His mantra can be summarised as this — it is imperative that water be made a national security priority to ensure an urgent response to the climate crisis. He points to the recent water crisis in Bengaluru as something that could happen to any city.

He has also suggested that the government pump RM10bil a year into the sector for the next three years to ensure our ageing water infrastructure is able to deal with challenges and to avoid any major water crisis.

One of the well-documented problems in countries like Malaysia is non-revenue water (NRW), which is when water is lost through leakages and theft, among others.

The government aims to reduce NRW to 31% by 2025. The PwC writers note that Malaysia’s NRW now is 37.2% (with four states having NRW exceeding 50%).

“Getting to the root cause involves fixing leaks, addressing water theft issues through investment in monitoring technology and working with the public to report water loss activities, among other solutions,” they say.

Santiago says more than RM8bil has been lost because of NRW over the last five years.

Datuk Chong Toh Wee of Cosmos Technology International Bhd, an exhibitor at ASIAWATER 2024, says there are products that can be easily installed in pipes using sound technology to detect and pinpoint locations of leakages.

One of his partners is a group from the Chinese city of Ningbo, where NRW stands at a mere 10% as in many other parts of China. This is achieved by a combination of good management and use of technology, he says.

However, the water sector in Malaysia has historically been plagued with another problem — corruption. Industry players wax lyrical about how challenging it was to deal with water operators in Malaysia in the past due to this problem.

Interestingly, SPAN’s Santiago tackled this issue in his speech at the conference, excerpts of which we are carrying on Page 8.

“We have started minimising corruption within the industry. All industry players have undertaken the corruption-free pledge and we encourage at least 1% of the operating cost of water service operators to be channelled towards training and capacity building on integrity and ethics on a continual basis,” he said in his speech.

He added: “ESG is also about amplifying social aspects and governance within the water services industry. In 2023, during the tariff review, it was agreed that the water and sewerage operators will account for and report on how the extra revenue gained due to tariff adjustment is being utilised. These reports are expected to be publicised on their websites as a key to greater governance in the industry”.

Meanwhile, PwC points out that effective water management requires a whole-of-government approach where different levels of the government (federal, state, local) across various ministries/agencies need to collaborate.

They also add that water infrastructure financing through public-private partnerships can promote sustainable solutions such as a circular water economy.

This article first appeared in Star Biz7 weekly edition.

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