THE Ministry of Water, Land and Natural resources (KATS) is seeking the Federal Government’s approval for its proposed Tariff Setting Mechanism (TSM).
TSM is a guideline formula that calculates rational and forward-looking water tariffs. It compels water operators to set tariffs that cover operational expenditure (OPEX) for day-to-day business activities and capital expenditure (CAPEX) for funding infrastructure upgrading and new infrastructure projects.
PBA Holdings Berhad (PBAHB) and Penang Water Supply Corporation (PBAPP) chief executive officer Datuk Jaseni Maidinsa said the corporation was still awaiting the TSM approval before formulating a water tariff review proposal that incorporates CAPEX provisions to fund PBAPP’s projects in the future.
“Our water tariff review proposal will be scrutinised by the Penang government, the National Water Services Commission (SPAN) and the Federal Government before obtaining approval.
“Reviewing the domestic water tariff will automatically reduce PBAPP’s domestic water subsidy. The subsidy reduction will free up funds for PBAPP to undertake its projects for the future.
“Presently, the most critical water supply project for the state’s future is the Sungai Perak Raw Water Transfer Scheme (SPRWTS),” Jaseni told a press conference at Hotel Jen today.
Jaseni said: “Penang’s average domestic water tariff for the first 35,000 litres per month is the lowest in Malaysia, at RM0.32 per 1,000 litres compared with the national average of RM0.69 per 1,000 litres.
“The state’s per capita domestic consumption last year (2018) was the highest in the country at 278 litres per capita per day (l/c/d) compared with the national average of 201 l/c/d in 2017.
“Penang’s per capita domestic consumption was 276 l/c/d in 2017.
“We intend to review the water tariff to raise the value of water. The aim is to convince all domestic consumers of the need to conserve water in the same manner as they conserve electricity and fuel.
Jaseni also stressed on the importance of tapping a second major raw water resource soon.
“Penang needs to tap a second major raw water resource soon because it has become overdependent on Sungai Muda as its one and only major raw water resource.
“Projections indicate that Sungai Muda may be able to meet Kedah and Penang’s raw water needs up to 2025.
“As such, Penang needs the first phase of the SPRWTS to be commissioned by 2025,” Jaseni said.
Also present were Chief Minister Chow Kon Yeow, Deputy Chief Minister II Prof Dr P. Ramasamy and state Public Works, Utilities and Flood Mitigation Committee chairman Zairil Khir Johari.
Story by Christopher Tan
Pix by Adleena Rahayu Ahmad Radzi
Video by Alissala Thian