Water tariff hike to be used to pay debts and improve infrastructure, says regulator

PETALING JAYA: Money earned from higher water tariffs will be used to pay off debts, replace decades-old pipes and valves, and fix leaks in the distribution system, says the federal water regulator.

National Water Services Commission (Span) chairman Charles Santiago said the tariff hike is not meant to burden consumers or allow water utilities, some of whom are straining with massive debts, to make a profit.

The new prices, which average about 22 sen per cubic meter, are still unable to cover the average cost of providing treated water, which is RM1.75 per cubic metre, Santiago said.

"Some state water companies have accrued a huge amount of debt, with a big bulk owed to Tenaga Nasional Berhad (TNB) for unpaid electricity bills for water processing plants, and there is no way they can pay the debt with the present tariffs.

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"We also need to increase the capacity of existing water treatment plants and build new ones while there are 30-year-old pipes that need replacing," Santiago said when contacted on Wednesday (Jan 17).

"All this has to be done urgently. It's not to burden anybody, but it is an investment for the future," Santiago said, adding that average domestic water consumption is high at 230 litres per person daily.

Water utilities have been told to provide Span with a list of all the projects that will be implemented with the new revenue, and these details will be posted on all the respective operators' websites, he said.

Besides addressing current needs, Santiago said increased revenue from the new prices will go towards preparing the water sector to deal with climate change, where raw water sources could decline.

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"It's time to invest in infrastructure, or we won't be able to manage future climate emergencies, which will affect productivity of businesses, factories and households," he said.

Santiago also said that some states have agreed to introduce special programmes to support B40 families paying for the higher tariffs.

"It's something they have to decide, and they will make their own announcements on how they are upholding the promise," he said, adding that the water tariffs will be reviewed again after three years.