No water tariff hike for now, says minister

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KUALA LUMPUR (July 21): The federal government assured that water tariffs will not be raised at this point in time when people are still facing economic headwinds with the Covid-19 pandemic yet to be overcome, said Environment and Water Minister Datuk Tuan Ibrahim Tuan Man. 

This was as the minister acknowledged that water tariffs are reviewed from time to time by regulator National Water Service Commission (SPAN) to take into account the costs of developing the related water infrastructure. 

Tuan Ibrahim (PAS-Kubang Kerian) was responding to questions in the Dewan Rakyat on whether the government can ensure that water tariffs in the Klang Valley will not be increased after Putrajaya hands over the Langat 2 water treatment plant to Pengurusan Air Selangor Sdn Bhd (Air Selangor).

“The federal government via Pengurusan Aset Air Bhd (PAAB) has invested over RM4 billion via borrowings for the development of Langat 2,” said Tuan Ibrahim. 

“This does not include the allocation of RM3.9 billion to bring raw water from Empangan Kelau in Pahang to be treated in Langat 2,” he said.

The facility will be handed over from PAAB to Air Selangor when development is completed in 2023, based on the Selangor water supply industry restructuring agreement that was inked in 2014. 

In return, Air Selangor will pay a lease of RM232 million per year to PAAB for 45 years to recover the costs of the project.

“Funding for the project will be translated in the form of tariff that is suitable to ensure Air Selangor can pay its lease to PAAB,” said Tuan Ibrahim.

“This includes the overall development costs of the project, as well as operating costs for water treatment, distribution, customer service and administration. This is important to ensure the long-term financial sustainability of Air Selangor to ensure uninterrupted operations of Langat 2.

“I would like to give assurance that any water tariff review in the country including Selangor will take into account the multiple parties involved in water management. SPAN as the regulatory body of the nation’s water industry will undertake the necessary discussions.

“However, I would like to emphasise that in this situation where the people are facing heavy economic burden with the Covid-19 pandemic yet to be overcome, I assure that the government will not increase water tariffs in the current situation where the people are burdened,” he added. 

The Langat 2 water treatment plant will supply 1,130 million litres per day when it is commissioned in 2023. 

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