Six states to raise water tariffs to curb capex issues

The tariff increases are needed to fund technological upgrades at water treatment plants nationwide


The federal government has reached an agreement with at least six states to raise water tariffs, with two more states expected to make similar revisions after a 20-year impasse.

Water, Land and Natural Resources Minister Dr Xavier Jayakumar (picture) said the decade-old delay of a tariff revision has resulted in operational problems at state-owned water concessionaires.

However, he did not name the states involved, neither did he state the amount of the increase.

“What is happening now is that operational costs are not rising on par with the rise in tariff, and this has left several operators in a challenging financial position, which makes it hard for them to offer quality water services.

“That is why we have come to a stage where the federal administration, together with the National Water Services Commission and the state governments, has agreed to increase water tariffs nationwide,” Dr Xavier told the Dewan Rakyat yesterday.

He was responding to a question from Datuk Seri Bung Moktar Radin (Barisan Nasional-Kinabatangan) who asked for justification on the increase in water tariff and the ceiling price for each state.

The Kuala Langat MP said the tariff increases are needed to fund technological upgrades at water treatment plants nationwide.

Dr Xavier cited the Water Services Industry Act 2006 grants authority to the federal government to step in and assist, or to take over the operations of water assets.

He said failure to manage public water assets properly will lead to supply disruptions, as seen in Selangor for over a decade, before Pakatan Harapan took over Putrajaya.

The water issue in Selangor has now been put to bed, with the state now being used as a reference for the government’s proposed water consolidation plan in other states.

In November last year, Dr Xavier said the federal government was in full gear to restructure the water industry in all states nationwide.

The fragmented condition of water assets in the country has made water supply cuts and shortages commonplace in many states.

The absence of a regulatory standard has also made it impossible to normalise systems and tariffs to address the problem.

Dr Xavier had previously said efforts are underway to proceed with the multi-layered plan to consolidate state water assets under one roof.

He had led meetings with several states to discuss the water industry’s restructuring and explain the benefits for the state governments to take up the offers dished out by Pengurusan Aset Air Bhd.