KUALA LUMPUR: The Association of Water and Energy Research Malaysia (Awer) is urging the Natural Resources and Environmental Sustainability Ministry (NRES) to prioritise the ongoing challenge of non-revenue water (NRW), which has surpassed 30 per cent nationwide.
Non-revenue water refers to water lost before reaching end-users, often due to leaks, theft, or inefficiencies in the water supply system, among others.
Awer president S. Piarapakaran said the additional revenue generated from the recently introduced water tariffs should be used to improve service efficiency, enhance water quality treatment, and minimise water supply disruptions.
He also said the information regarding operating costs and cost components, traditionally disclosed in annual reports for an extended period, has ceased to be published since 2020.
"Why is transparency in the costs passed on to tariffs fading over time? This is where the National Water Services Commission (Span), NRES and the state governments will ensure the water companies deliver improvements," he said.
Piarapakaran said the National Water Services Industry Restructuring under the Water Services Industry Act 2006 mandates a tariff review every three years, utilising a transparent benchmarking mechanism to ensure fair cost determination.
Despite the established benchmarking method, Piarapakaran criticised Span for consistently employing the 'cost plus' method, which fails to identify inefficient costs.
This oversight, he said, results in significant consequences, such as inefficient costs amounting to RM 37.47 million annually.
"With the recent tariff increases and the ongoing review, consumers expect improved service and water quality.
"However, concerns persist as water companies cite funding shortages for poor services, prompting consumers to hold them, state governments and Span accountable. Transparency is needed to monitor the achievements of these water companies effectively," he said.
In a call for accountability, Piarapakaran urged the government to initiate progress by publishing comprehensive information detailing the improvements expected in each water supply zone by the end of 2024 and 2025.
This transparency, he believes, will benefit consumers by holding water companies accountable for their commitments.
Given the prevailing economic circumstances, Piarapakaran voiced apprehension about the inefficient costs incorporated into the tariff structure.
"Each state will announce its corresponding increases for its tariff bands. Domestic consumers have three tariff bands with incremental charges using a punitive mechanism based on water usage.
"When the tariff mechanism was developed, the social and affordability components were core values in our tariff setting. Rebates and charge waivers are part of the billing process to assist the needy," he said.
Piarapakaran said this following Span's announcement that the new water tariffs for domestic users in Peninsular Malaysia and the Federal Territory of Labuan will involve an average increase of 22 sen per cubic metre, effective from Feb 1.
This adjustment is expected to impact approximately 6.9 million users in the domestic category, representing 86.6 per cent of the 7.9 million account holders.
The 22-sen increase constitutes the average increase for every 1,000 litres of water used.
The new water tariff is anticipated to result in escalated billing ranging from RM1.60 to RM8 for each residence or an increase of five to 27 sen per day for households using 20 cubic metres of water per month.