KUALA LUMPUR – October 28, 2011

Universiti Teknologi Malaysia (UTM) and The Malaysian Water Association (MWA) have initiated a dialogue to address some important issues on water in Malaysia. Revolving around the theme “Water has no Value”, selected panel members were given the task to deliberate and address some essential issues on water such as public perception on water value, public role in conserving water, Government responsibility to educate the public, effect on tariff change, and sustainable water management.

The MWA-UTM Roundtable Dialogue is a gathering of experts, industry players, academics and concerned people on water woes in Malaysia that strongly urged for drastic actions to be implemented based on issues raised and discussed.

It was successfully organised on the 28^th October 2011 at UTM International Campus, Kuala Lumpur attended by 200 participants from various sectors in Malaysia, such as SPAN, MWA, BEM, IEM and other NGOs related to the water industry. The event was moderated by Prof. Dato’ Dr. Ir. Zaini Ujang, UTM Vice Chancellor and MWA Council Member. The panellists include:

Tan Sri Dato’ Ir. Shahrizaila Abdullah – Senior Fellow, Akademi Sains Malaysia

Dato’ Wan Ngah Wan Ali – Immediate Past President of MWA

Tn Hj Mohd Azmi Abdul Hamid – Consumers Association of Penang (CAP)

Ir. Jaseni Maidinsa – General Manager, Perbadanan Bekalan Air (PBA) Pulau Pinang

Prof. Chan Ngai Weng – Penang Water Watch

In general, the panellist agree that the existing water tariff is not sustainable for the industry and a revised water tariff structure could lead to better natural resource management through water conservation and ensure financial viability for the water utility companies. In addition, Malaysia is facing high average water consumption per capita (203 litre per day), increasing demand, limited new sources, water pollution and lack of success in promoting alternative water resources and water reuse/recycling. The future water management strategy should combine both supply enhancement and demand management approaches.

The main predicament with Malaysians is that they do not value water as the tariff is too low.  Singapore, for instance, has increased their water tariff ten times compared to Malaysia and people accepted this decision. The existing water practice and policy in Malaysia is not sustainable and an appropriate water supply demand management and integrated catchment management must be in place. In addition, the public should be educated on water issues and the importance of water conservation.

Typically, water has no value in Malaysia because of the low water cost and the non revenue water (NRW) is very high. Thus, reviewing the existing water tariff and increasing the price will drive NRW down, promote natural resource management and integrated catchment management, change the public perception about the value of water, ensure financial viability for the utility companies and provide the revenue needed for suitable asset maintenance.

Despite a lively discussion on review of water tariffs, participants from the Forum recognised that water has social, security and environmental values which go beyond monetary value. While abstraction, treatment, delivery processes have a cost, water cannot be left to market forces to dictate the value.

The panelists also agree that water operators should be responsive and provide evidence to reduce the Non-Revenue Water (NRW). It is very important to educate the public on NRW and this will positively push sustainable water pricing. The water utility companies have a responsibility to educate the public and effectively communicate the importance of water, which will support the increase of the water tariff.

In addition, many politicians use the issue of unpopular water decision as a political device. This scenario will effect the public perception on water sustainability and ultimately on the water tariff. It is essential that the public and politicians know their role in conserving water and they must have an enhanced knowledge on water issues.

The main resolutions and proposed immediate actions from the dialogue are as follows:

1. Review current water tariff structure. Strong and unanimous agreement that Malaysians do not ‘correctly’ value water. Water is currently under-priced. A low water tariff has driven the perception that water is plentiful and cheap. Consequently, Malaysia has developed excessive and profligate habits due to the low water tariffs; and this is leading to water scarcity in some urban areas. This scenario is not sustainable for Malaysia moving towards developed nation status in 2020.
2. Water utilities to reduce Non-Revenue Water (NRW). To support a review of current water tariffs, a concerted effort is required by water utilities to improve their performance and reduce Non-Revenue Water (NRW). This will instil trust in the utility by the consumer. Water utilities play an important part in getting consumers to pay an increase in water tariffs. Currently, NRW for Malaysia is approximately 40% but should aim to reduce to developed country levels of 15%.
3. Establish a holistic and integrated sustainable water policy for Malaysia. Currently, no overarching water policy exists for Malaysia. As a consequence, planning of water resources – from upstream catchments, to abstraction and treatment of water and wastewater – is not considered in relation to and against other needs. Integrated catchment management and water demand management are two strategic approaches to be included in a national water policy (see resolutions 4 and 5).
4. Adopt Integrated Catchment Management. Integrated catchment management, which is a subset of integrated water resource management, is vital to Malaysia’s policy direction and sustainable management of water resources, from the raw water in the rivers, to the treatment of water and wastewater. Better management of water courses is required. Catchments, where we abstract for our water for treatment, need to be protected to ensure water companies can effectively treat water. Polluted rivers are not only bad for the environment but lead to expensive water treatment for the water utilities.
5. Adopt Water Demand Management. A fundamental move is needed towards ‘water demand management’ and away from ‘supply water management’. For example, demand management via metering. This will help to control water landscape via policy adjustment pricing and demand management.
   Educate the public on water issues. Education is the key ingredient for sustainable water management. This applies to education programmes at school level and also across industries.
6. Strong leadership in a move towards sustainable water management. Captains of Industry (engineering boards and institutions, MWA, universities) need to take a more prominent role to educate the politicians and the public.
7. Examine opportunities for water conservation techniques. Explore opportunities for conservation technologies such as rainwater harvesting which can have a major role in Malaysia’s water policy and management to move forward.
8. Learn from the Singaporean model in future policy development for Malaysia. The example of Singapore’s water management can provide important lessons for Malaysia. Singapore has managed to drive water consumption levels down with correct water pricing, integrated policies, and educating public and politicians alike. Singapore regards water as ‘water scarce’ because they place greater value on water.
9. Depoliticise the water sector. Review how Malaysia can look to depoliticise the water sector. Currently, politics is an obstacle to current water sector development.