Water tariff rate to increase by year-end

Minister says the base rate nationwide will be raised between 6 sen and 71 sen per 1,000 litres

By ALIFAH ZAINUDDIN / Pic By TMR

The government’s move to standardise water tariffs nationwide will likely see the base rate increasing between six sen and 71 sen per 1,000 litres by year-end, said Water, Land and Natural Resources Minister Dr Xavier Jayakumar (picture).

In a written reply to the Dewan Negara last week, the minister said the new tariffs under the tariff setting mechanism (TSM) take into account the interests and rights of the lower-income group on access to water supply.

The proposed hike is still considered much lower compared to other utility tariffs such as electricity, gas and telecommunications, Dr Xavier said. He was responding to a question from Senator Datuk Ng Chiang Chin who asked if the government would raise water tariffs this year.

However, to ensure the implementation of TSM will not burden the low-income households, the government will enforce a minimum increment for water usage under 20 cu m, which represents 47.8% of domestic consumers in Malaysia.

The TSM proposal also takes into account the need to educate consumers to use water prudently and be environmentally friendly, thus it’s fair that the higher tariff rates apply for higher water usage which ranges above 35 cu m and for commercial consumers.

The recommendation by the National Water Services Commission to implement the TSM aims to establish a systematic, transparent and fair water tariff mechanism.

The TSM has two key features, namely — the uniformity of the existing tariff structure, and the adjustment of existing tariffs to ensure that it is not too far compared to the actual cost of providing water supply services.

Last month, Xavier said the federal government 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.

He 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, nor did he state the amount of the increase at the time.

“What is happening now is that operational costs are not rising on par with the rise in tariffs, 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,” he had explained.

The minister said the tariff increase is needed to fund technological upgrades at water treatment plants nationwide.

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.