Govt extends Indah Water’s concession until 2034

by S BIRRUNTHA / graphic by TMR

THE government has agreed to extend the concession agreement with the national sewerage company Indah Water Konsortium (IWK) Sdn Bhd for another 12 years until Dec 31, 2034.

Environment and Water Minister Datuk Seri Tuan Ibrahim Tuan Man said the additional concession agreement was made based on the excellent performance shown by IWK over the past 30 years.

IWK has been in charge of managing and maintaining public sewerage systems nationwide since April 1, 1994.

Tuan Ibrahim added that the additional agreement also covers the implementation of non-tariff business activities by IWK, which includes the production of recyclable water from sewerage bi-products so that it can be supplied to industries as an alternative water source.

He emphasised that IWK needs stable financial resources through a sustainable business operation plan, as well as financial assistance from the federal government. He added that the sustainability of water resources and public health is highly dependent on IWK’s financial capability in carrying out its responsibilities.

“The amendment to the concession agreement allows IWK to explore various other business potentials related to sewerage services such as the use of fertilisers for non-food crops.

“This agreement also allows IWK to provide small leases of sewerage land for rent to telecommunication towers, solar energy production or fibre optic cables.

“Additionally, IWK in collaboration with other water industry players will start a used water recovery initiative in Selangor, which will be followed by other states in the future,” he said during the virtual signing ceremony of the concession agreement between the government and IWK yesterday.

The agreement was signed by the Ministry of Environment and Water secretary-general Datuk Seri Zaini Ujang and IWK CEO Narendran Maniam.

Commenting further, Tuan Ibrahim said sewerage tariff rates in the country need to be carefully reconsidered to cover operating costs and increase the assets of IWK.

He noted that since the concession agreement on April 1, 1994 until now, IWK has been responsible for the management of key assets of the country’s sewerage system involving more than 7,000 sewage treatment plants and sewage pipes stretching 22,000km.

He said the company was also asked to maintain about 1.3 million individual septic tanks and more than 800,000 traditional toilet tanks, an increase of almost 10 times over the initial concessions signed.

However, Tuan Ibrahim said IWK’s main challenge currently is to ensure all the sewerage assets operate optimally and at the same time, upgrade the system with cost-efficient, effective technology, as well as bring in new equipment.

“The improvement in the quality of services will affect IWK’s operating costs because since the beginning of operations, the tariff for sewerage services to consumers has remained the same and has never been revised.

“In reality, the average sewerage system maintenance cost for each connected premise is about RM17 per month, compared to the current tariff of between RM2 to RM8 per month,” he added.

Additionally, he also said based on the study conducted, the review of sewerage service tariffs should be carefully considered to offset the cost of maintaining old assets, the increase in electricity tariffs and the emergence of new and complex threats of environmental crime.