Water tariff mechanism proposal to be presented to Cabinet

Some state governments have not seen water tariff increases in the last 40 years, says minister Nik Nazmi Nik Ahmad.

Natural resources, environment and climate change minister Nik Nazmi Nik Ahmad said his ministry is developing a mechanism that eliminates the need to seek ministerial approval for tariff adjustments.

KUALA LUMPUR: The natural resources, environment and climate change ministry is submitting a proposal to the Cabinet on a mechanism to set water tariffs.

Its minister, Nik Nazmi Nik Ahmad, said there is a unanimous consensus among all state governments on raising water tariffs, as some have not seen an increase in the past 40 years.

“We would allow water operators to determine the tariff rate, but at the same time, we will still look at how we can safeguard the interests of both the B40 and M40 consumers,” he said.

In May, Nik Nazmi said Putrajaya was planning to establish a maximum rate for the revision of the water tariff following requests from “two to three” states to increase domestic water tariffs for financial sustainability.

While water operators would have the flexibility to determine rates, the minister said they must ensure the rates remained below the established maximum rate, to be regulated by the National Water Services Commission (SPAN).

The previous government had agreed to maintain water tariffs for residential premises in Peninsular Malaysia and Labuan due to the rising cost of living.

A Cabinet meeting on June 22, 2022 agreed to adjust the water supply tariffs for non-domestic categories and special categories in Peninsular Malaysia and Labuan, effective Aug 1, with an average increase of 25 sen per cubic metre.

It followed the Cabinet’s agreement to the use of the tariff-setting mechanism to reorganise the management of the country’s water supply.

The mechanism, developed by SPAN in 2016, was described as a systematic, fair and transparent water tariff mechanism aimed at guiding the national water service industry to achieve long-term sustainability.

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