GEORGE TOWN: While water tariff rates for domestic users are set to go up in Peninsular Malaysia and Labuan, in Penang rebates will be offered to the B40 category to cushion the blow.
Chief Minister Chow Kon Yeow said following the adjustments in tariff, rebates would be offered by the Penang Water Supply Corporation (PBAPP).
He said that the rebate programme will specially target B40 groups under two categories.
"One is under the 'Rebat Mesra Keluarga' for B40 families with eight people and above and a household income of RM2,250 a month will receive a rebate of RM10 a month.
"The second is 'Rebat Mutiara' for those who fall under the eKasih scheme with an income of RM1,036 a month will receive a rebate RM10 per month as well," he said at a press conference held in Komtar on Wednesday (Jan 17).
This announcement came on the heels of the National Water Services Commission (SPAN) announcing that water tariff rates would be increased to 22 sen per cubic meter from Feb 1 for domestic users in Peninsular Malaysia and the Federal Territory of Labuan.
Chow said it had been 31 years since the water tariff had been increased with the last one being in 1993.
"In Penang it has never increased in the past 31 years. Now we have to accept and abide with the changes made by SPAN. It no longer can remain the same, as if there is no change then there will be no funds for any projects.
"We need to change the perception as there are many challenges including aging infrastructure.
"We have on several times postponed the adjustment of tariff rates, and the impact has been causing delays in the implementation of new infrastructure projects including fixing aged leaking pipes," he said.
Chow, who is the PBAPP chairman, said they (PBAPP) would have to bear the subsidy.
"For many years Penangites have benefitting from a huge subsidy. From 2019 to 2023, PBAPP has subsidised about RM503mil in the water tariff.
"The water tariff rate in the state of Penang is lower than the operating cost of PBAPP and consumers pay a very low price from the actual cost.
"In fact, with the new tariff rate adjustment, PBAPP is expected to earn a total of RM86mil a year.
"However, PBAPP still has to bear the budgeted subsidy amounting to RM78mil for the same period," he said.
On Wednesday (Jan 17) SPAN said in a statement that the adjustment is under the Tariff Setting Mechanism (TSM).
SPAN added that the increase was still low and would be unable to cover the cost of providing water, which was RM1.75 per cubic meter based on 2022 records.
It said the move was necessary and could not be deferred, to avoid jeopardising long-term sustainability of the water service industry.
SPAN added that it was crucial that tariff adjustments reflected the cost of water supply to ensure operators deliver quality water by enhancing service levels.
