Gov’t gets deadline to justify water tariff hike
Malaysiakini
Oct  17, 2006
Soon Li Tsin

The government, accused of bailing out a profit-making water consortium that will now benefit from a tariff hike, is being challenged to reveal its audit report and concession agreement. 

Representatives of the Malaysian Trades Union Congress and Coalition Against Water Privatisation (CAWP) told reporters that they are giving the government until Nov 16 to release the Auditor-General’s report.

CAWP co-ordinator Charles Santiago said the report would explain how the government made its decision to increase the water tariff by up to 15 percent in the Klang Valley.

The tariff increase - granted to Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) - was announced last Saturday by Energy, Water and Communications Minister Dr Lim Keng Yaik.

He said Syabas was entitled to a 15 percent increase because it had successfully reduced non-revenue water (NRW - water stolen or lost through leakage) by more than five per cent within a year, according to the concession agreement.

Said Santiago: “It’s a very specialised and expensive exercise to audit the NRW. We want to know the experience and expertise of the Auditor-General’s department in auditing the NRW.”

He questioned the concession agreement under which the government paid RM2.9 billion to Syabas to provide water supply. Of this, RM 215 million was to reduce NRW.

“So the government gives money to Syabas to reduce NRW and Syabas does just that. Now they say that, since the requirement has been met, they have to increase the price of water,” Santiago said in disbelief.

“Only Lim understands this logic. It’s not fair to let consumers pay for subsidies which the state has already paid.”

Cleaner water?

Santiago noted that Syabas had raked in a profit of RM200 million last year and is set to receive an additional RM100 million in pre-tax profits from the tariff increase.

He refuted Lim’s claim that the increase should not affect the lower income group as those who consume less than 20 cubic metres of water per month will not be affected.

“Once industries are affected they will past the costs to the consumer. The price of your teh tarik and your coffee is all going to go up,” he said.

Santiago also warned that, while consumers will pay more, the quality of water may not improve.

“The quality of the water in the Klang Valley is not great. We’re paying for inefficiency and mediocrity. We will pay more, but it’s not like the water will get any cleaner,” he said.

Syabas is 70 percent owned by Puncak Niaga, with the balance owned by the Selangor government.

Water supply was privatised on Jan 1, 2005, with the company being responsible for distribution in Selangor, Kuala Lumpur and Putrajaya.