IWK calls for tariff review for operational and financial sustainability
IWK

The adjustment made to the sewerage charges will enable both IWK and its customers to continue protecting the environment

by S BIRRUNTHA

INDAH Water Konsortium Sdn Bhd (IWK) has called for a tariff adjustment to increase sewerage charges in order to enable the company to cushion its financial and operational sustainability.

Its chairman Ahmad Johnie Zawawi said the adjustment made to the sewerage charges will enable both IWK and its customers to continue protecting the environment and public health.

As vital as it is for tariff adjustment to be made, the govt’s subsidy should be channelled directly to B40 customers, says Ahmad Johnie

He added that due to the impact caused by the Covid-19 global pandemic, the national sewerage company is stuck in a dire position as it has never increased the tariff since its inception.

“The gradual impact on the company’s financial and operational sustainability grows detrimental with the passage of time.

“The crucial aspect underlining the entire situation is that IWK needs the support and contribution of its customers to preserve the environment for the current and future generations,” he said in a statement recently.

Ahmad Johnie said the Movement Control Order (MCO) period, which has been in effect only for a few months, has driven many businesses to take steps to balance out the margin in revenue for business preservation.

He also noted that there are news reports of business owners considering price increases for products and services to keep their businesses afloat after suffering a major blow during the MCO.

At the same time, he said IWK is also implementing other initiatives to improve its position through other businesses such as waste-to-energy projects.

“This includes the reuse of bio-solids for renewable energy generation, development of water reclaim business, and management of fat, oil and grease (FOG),” he added.

Ahmad Johnie also said as vital as it is for tariff adjustment to be made, the government’s subsidy should be channelled directly to B40 customers, for example via the e-Kasih programme.

“IWK customers who are eligible under the government’s e-Kasih programme should be able to obtain reduction and assistance,” he noted.

During the initial MCO period, IWK along with other frontliners and essential service providers had continued to operate and provide their services.

All 8,146 of IWK’s sewage treatment plants (STPs) and network pumping stations (NPS) were fully operational to ensure preservation of the environment and public sanitation.

For every cubic metre of water treated by IWK, customers are paying less than 30 sen

At a time when other businesses were not in operation, the quality of environment and rivers saw improvement, demonstrating the compliance to the high standards stipulated by the Department of Environment (DoE).

Ahmad Johnie said this resulted in treated effluents that were safely released into waterways without causing harm to the environment.

“The task of balancing the operational expenditure with the quality of service provided to customers is indeed an arduous one. “As new sewerage assets undertaken by the government are handed to IWK for operation and maintenance, coupled with ageing assets and higher compliance standards, operational expenditure (opex) will incontrovertibly increase,” he added.

IWK has continued to explore methods to drive down operational costs, while providing quality service to its customers nationwide.

Since 2015, IWK is able to reduce operational expenditure in the face of increasing number of assets under management, maintain good level of service to customers and have higher compliance rate of discharged effluents by STPs.

Additionally, the cost of operation per household stands at RM18, which is 125% higher than the RM8 per month that customers are paying.

Ahmad Johnie said the government subsidises the shortfall suffered by IWK for the people, but there is a need to free up the resource so that the allocation can be put to better use elsewhere.

He added that this is coupled with the fact that sewerage charges in Malaysia is one of the lowest in the world, compared to the sophistication of service provided.

“For every cubic metre of water treated by IWK, customers are paying less than 30 sen.

“However, the charges have not been revised for more than 25 years since the national sewerage company began its operation,” he said.