Govt introduces incentives for water companies

by HARIZAH KAMEL/ pic by BERNAMA

THE government has come up with two incentives to ease the financial burden of water companies, revealed Environment and Water Minister Datuk Tuan Ibrahim Tuan Man (picture).

He said the incentives will ensure water supply to the population is maintained as water is one of the essential services.

“Firstly, the National Water Services Commission (SPAN) will grant the licensee an annual licence fee of 30% of the total income. The move will provide RM24 million in savings to licensees and loss of income to SPAN.

“Secondly, Pengurusan Aset Air Bhd (PAAB) will delay leasing payments for existing water assets for three months commencing April 2020 involving a delay of payment worth RM100 million,” he said in a statement yesterday.

This deferral only applies to leases on state government water supply loans acquired by PAAB through the national water service industry restructuring initiative, said Tuan Ibrahim.

He revealed that the move was made following a reduction in demand for water supply by the industrial, commercial and manufacturing sectors by approximately 60% due to the Movement Control Order (MCO).

“Additionally, water companies have to bear the rising operating expenses (opex), especially the cost of purchasing chemicals, chlorine and electricity bills.

“This is following SPAN’s directive of instructing water operators to increase chlorine release in treated water from 0.2 parts per million (ppm) to 0.5ppm to eradicate the Covid-19 virus recommended by the World Health Organisation,” he said.

He also stated other major opex include the payment of electricity bills representing almost 50% of the production cost for one cu m of clean water.

He added that the ministry through SPAN will continuously monitor the water supply through-out the MCO period and take necessary steps to ensure that the interests and welfare of Malaysians are maintained.