Abnormally hot weather next year from the El Nino effect will cause the demand for water to spike in the Klang Valley, which already suffers from distribution problems. – The Malaysian Insider file pic, September 28, 2015.
In the second part of our series reviewing Azmin Ali’s first year as Selangor menteri besar, we take a look at the long drawn-out exercise to restructure the leaky water industry. Did Azmin do better a job than his predecessor, Tan Sri Abdul Khalid Ibrahim, and does this mean an end to water cuts for Selangor, Kuala Lumpur and Putrajaya residents?
Dry taps in parts of Selangor, Kuala Lumpur and Putrajaya remain a possibility despite the fact that the Selangor government has wound up a long overdue agreement to restructure the water industry.
Water industry expert S. Piarapakaran said this was one of the consequences of delaying the restructuring, which began under former menteri besar Tan Sri Abdul Khalid Ibrahim, and now continuing under his successor, Azmin Ali.
Restructuring the industry was a key policy promise by Selangor Pakatan Rakyat in the 13th general election. But a change in menteri besar in 2014 delayed the signing of agreements that would have formally started the process.
Under the restructuring, the lucrative but leaky Selangor water industry would be taken out of the hands of four private companies and put under state firm Air Selangor.
Selangor PR argued that this was necessary to provide residents with reliable water supply at affordable rates and to plug gaping holes in the distribution system which led up to one third of treated water being wasted.
But critics have claimed that the restructuring process under Azmin was stunted because he only managed to take over three out of the four companies. Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH), which controls three major treatment plants, refused Selangor’s offer of a buyout.
Delaying the agreement has affected efforts to increase treated water supply to meet demand from the eight million people and tens of thousands of businesses in the densest concentration of people in Malaysia.
“Right now, demand for treated water is nearly equal to total supply,” Piaraparakan said, adding that the reserve margin between total demand and supply is small.
Federal regulator the National Water Services Commission (SPAN) said that the reserve margin was between 1% and 3% depending on the area.
Selangor’s treatment plants produce about 4,700 million litres per day (MLD) while demand is about 4,600 MLD.
The reserve margin measures show much extra supply there is compared with demand. The higher the margin, the better, said Piarapakaran, who is president of the Association of Water and Energy Research Malaysia (Awer).
“Optimally, it should be 20%, but you can have an operational margin of 10%. So if demand spikes because of festive seasons or hot weather, it will outstrip the supply of treated water.
“This will lead to some residents not having water, especially those at the end of the distribution network,” said Piarapakaran.
He said this could happen when demand spiked during the lead up to the Chinese New Year and Hari Raya festive seasons next year as food manufacturers ramp up production.
Abnormally hot weather next year, which meteorological experts predict will come from a severe El Nino event starting in the Pacific Ocean this month, could also drive up demand from households, said Piaraparakan.
Effects of no SPLASH
Khalid and Selangor PR had wanted to start the restructuring process soon after taking over in 2009, but Barisan Nasional-ruled Putrajaya, which needed to green light the negotiations, stalled them.
It was only after Selangor PR won a second term in 2013 that Putrajaya agreed to Khalid’s proposal for the state to take over the industry from the four companies for a total of RM9.6 billion.
Khalid, however, was removed by PKR over how he had conducted the restructuring. When Azmin took over, he continued where Khalid had left off but talks between Selangor and Putrajaya were strained because of wrangling over ownership of land where some of the industry’s facilities sit on.
SPLASH also said it disagreed with Selangor’s offer of RM3.17 billion to buy over its assets and operations. However, Selangor will continue negotiations with SPLASH to take over its assets.
When the all final parts of the agreement were signed in July this year, it was announced that only three companies would be taken over.
They are Puncak Niaga Sdn Bhd and Konsortium Abass, which operate treatment plants, and Syarikat Bekalan Air Selangor (Syabas) which controls the pipes and distribution network.
As Selangor had only taken over operations, Piaraparakan said, it would be some time before it plugged the leaks in the distribution network.
Selangor’s non-revenue water rate is about 34%, which is water lost from leakage and theft in the piping system. Meaning for every 100 units of treated water produced, 34 units go missing and do not reach end users.
Asked as to whether delays in signing the restructuring agreement would jeopardise supply, the menteri besar’s political secretary Shuhaimi Shafiei said both issues were not connected.
“The agreement relates to the commercial terms of the water industry. It does not jeopardise current (water treatment and supply) operations,” Shuhaimi said in a text message.
Shuhaimi added that SPLASH’s rejection of the takeover would not stymie the restructuring process and threaten the state’s ability to control water treatment.
The company owns three treatment plants which supply 3,000 out of the 4,700 million litres that the industry produces daily.
“The SPLASH issue is not related to water supply. In fact, SPLASH has always cooperated closely with the state government from the beginning till now on all issues related to water supply operations,” said Shuhaimi.
Piarapakaran said the most important component in tackling supply problems was the distribution system, in this case Syabas.
“If you control the distribution, then you can control costs and plug leaks, as all this requires constant maintenance and repair.”
Selangor and Putrajaya inked the final master agreement on restructuring on September 8.
Azmin was reported as saying Air Selangor would still have until July next year to negotiate with SPLASH.
- TMI
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