PETALING JAYA: While there is a possibility of a water tariff hike this year, domestic users will not be burdened with a significant increase, says Charles Santiago.
The National Water Services Commission (SPAN) chairman said some states have not revised their water tariffs in over four decades.
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Even if there is an increase in water tariffs, those who do not belong to the target groups such as the Middle 40 and Top 20 groups, will not be burdened with a significant hike in their water bills.
“Targeted groups will be protected (and) they will not be impacted by the revision.”
Santiago said the target groups here refer to the Bottom 40 group and those eligible for subsidies, adding that each state will have their list of target groups.
Last month, Natural Resources and Sustainability Minister Nik Nazmi Nik Ahmad (then natural resources, environment and climate change minister) said that a proposed mechanism to set new water tariffs for Peninsular Malaysia and Labuan will be brought to the Cabinet.
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He said existing water tariffs, including for domestic accounts, are expected to be reviewed when the mechanism comes into effect in the future.
Meanwhile, SPAN Corporate Communications and Consumer Affairs Unit director Mohd Fazil Ismail reportedly said on Jan 5, that the commission has conducted a Tariff Setting Mechanism (TSM) study to ensure a fair tariff adjustment for both water companies and consumers, adding that the water tariffs adjustment is expected to take place this year.
Mohd Fazil said the expected average increase imposed on consumers would only be an additional RM3 to the monthly bill, which works out to be 10 sen per day.
Santiago said a tariff revision is important to protect the interests of consumers, businesses and the country.
He said the projections for the next few months and years show that the situation is very unpredictable given the uncertainty in the trend of rainfall.
“We have the El Nino effect. If you see in some parts of the country it has not rained for a long time. Sometimes you have too much of rain and sometimes less rain,” he said.
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“So you cannot be assured all the time that there will be rain and sufficient water. To ensure there is sufficient water in the long run, we need to invest in new technology, treatment plants, storage mechanisms and so on.
“We have a challenge in front of us called climate change. There is uncertainty which means you have to be prepared,” he said.
Therefore, he said viable solutions such as investments into new equipment, long-term strategies to develop new technologies and new treatment plants are needed.
While all these require funding, many water operators too have been in the red.
“Water operators are having difficulties ... they have not seen a rate increase or a tariff revision for a very very long time,” he added.
Pahang for one, did not see a tariff revision for 40 years.
Pahang last revised its water tariff in 1983 while Perlis last had a revision in 1996.
Selangor has not had an increase in domestic water tariffs for some 17 years.
Santiago explained that the objective of the tariff hike is not solely to turn these loss-making water operators into profitable private companies. He said SPAN monitors these companies and they are required to reinvest a certain percentage of their profit into operations including upgrading works.
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