Every state has its own tariff rates and domestic consumers are charged depending on the amount of water that is consumed. In addition, the corresponding tariffs that are imposed are at different consumption levels.
Based on three different buckets of consumption of 20 cubic meters (cu m), 50 cu m, and 100 cu m, water bills for domestic users ranged between RM4.40 and RM16, RM25.65 and RM91.00, and RM79.40 and RM241 for states in Peninsular Malaysia respectively.
Table 1 Monthly Water Bills
(based on different levels of domestic consumption.)
Based on the domestic consumption, Penang is the cheapest for water consumption of less than 50 cu m per month while the highest is in Johor. (Is it because it is privatised?) For consumption of 20 cu m or less, Penang only charges 22 sen per cu m but in Johor, the rate is at 80 sen per cu m.
Penang charges 46 sen per cu m for consumption of more than 20 to 40 cu m while Johor’s rate is at RM2 per cu m for consumption of more than 20-35 cu m. The rate escalates to RM3 per cu m for consumption of more than 35 cu m in Johor, while in Penang, the rate is 68 sen per cu m for consumption of more than 40 to 60 cu m. The rates in Penang are further broken down for the consumption of more than 60 to 200 cu m and more than 200 cu m at RM1.17 per cu m and RM1.30 per cu m, respectively. In addition, Penang also imposes a 48 sen per cu m water conservation surcharge for consumption in excess of 35 cu m per month.
For consumption of 100 cu m per month, Terengganu has the cheapest total bill of RM79.40 while in Johor, the rate is almost three times more.
Similar to domestic consumption rates, the commercial rates too have a diverse range between states. Johor imposes the highest rate of RM3.10 per cu m for consumption of up to 35 cu m per month and this escalates to RM3.50 per cu m for consumption in excess of 35 cu m per month.
In comparison, Terengganu is the cheapest with a rate of RM1 per cu m and RM1.40 per cu m for the same tariff buckets.
Table 2 Peninsular Malaysia:
Commercial Water Tariff Rates.
PBA Holdings and Ranhill Utilities are listed entities and investors have direct access to the performance of the two water companies. In 2022, PBA recorded revenue of RM348mil, up 1.7% year-on-year (y-o-y) but pre-tax profit fell by 6.8% y-o-y to RM35.4mil. For Ranhill SAJ, which is the operating unit of the Johor water works, the company reported a revenue of RM1,154.9mil last year, up 1.2% y-o-y, while pre-tax profit improved by almost 90% to RM244.5mil, boosted by the recognition of non-revenue water (NRW) reduction incentives to be received by Ranhill SAJ amounting to RM142.3mil. In essence and excluding the one-off gain, PBA and Ranhill SAJ had a pre-tax profit margin of approximately 9.5% and 8.8%, respectively, in 2022.
It is generally understood that most other state-owned water concession companies are loss-making including Air Selangor, Malaysia’s largest water concessionaire.
Based on the information provided on its website, Air Selangor generated revenue of RM2.18bil in 2021 but operating expenditure for the year totalled some RM2.43bil, giving it a deficit of RM250mil in that year.
NRW has room for improvement. Both Penang and Johor have NRW at 26.3% at the end of 2022 against the national average (excluding Sabah and Sarawak) of 34.4% and the lowest among all.
According to the 2022 Water and Sewerage Handbook 2022, states with poor NRW levels are Perlis with an NRW of 61.5%, followed by Kelantan at 53.7%, and Kedah at 51.5%. More work needs to be done to reduce NRW, as the high NRW cost some RM2bil in losses to the states.
Penang has one of the lowest tariff rates, despite the conservation charge, is a testament that good water management is more than just raising tariff rates. That same mindset should apply to energy and other sectors that are monopolised by GLCs. And raising tariff rates is the easiest. We are such a compliant lot who hardly make any objections to raising tariffs.
Reference:
Time to address NRW, Pankaj C. Kumar, The Star, 17 June 2023
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