(From left) PBAHB chief financial officer Dr Mary Ann Harris, Pathmanathan, Chow and Penang DCM I Datuk Dr Mohamad Abdul Hamid at the PBAPP AGM in George Town.
A WHOPPING RM116mil was allocated for subsidising home water use in Penang last year.
Although this allowed residents to enjoy the lowest water bills in the country, it took a heavy toll on the state’s ability to ensure its water security.
“This level of subsidy was unsustainable,” said Penang Water Supply Corporation (PBAPP) chairman Chow Kon Yeow, who is also Chief Minister.
He explained that it stymied Penang’s ability to execute water supply improvement projects while the state’s tourism and high-tech industrial sectors, especially integrated circuits and semiconductor industries which need water, were growing rapidly.
Chow said this at PBAPP’s annual general meeting in George Town.
The revision of water tariffs early this year could see Penang consumers paying as much as 100% more.
The state’s water revenue is expected to improve in the coming years and much of the returns will be channelled into enhancing its water security.
To cushion against the higher water tariff, Chow said PBAPP would not bill domestic users for the first 10,000 litres in three bi-monthly bills from July to December.
This will benefit 596,000 registered water consumers.
“The total savings for each domestic water consumer will be RM18.60 in the six-month period.
“The projected impact on PBAPP’s revenue is about RM11mil,” he said.
Chow said PBAPP’s costs of supplying water had increased by 30% since the last tariff review in 2015.
“Key elements of this increase in costs include the significantly higher energy costs and operational water losses to pump treated water from Sungai Dua Water Treatment Plant (WTP) to Air Itam to conserve the reserves of Air Itam Dam in 2023 and 2024,” he said.
PBA Holdings Bhd (PBAHB) recorded RM34.348mil net profit last year, lower than the RM77.116mil net profit reported for 2022.
“This is primarily due to the fact that the net profit for 2022 included RM49mil in deferred tax assets recognised for unutilised reinvestment allowance.
“There was no such tax allowance for the 2023 financial year.
“In reality, PBAHB’s profit before tax (PBT) for 2023 was RM68.41mil compared to RM32.998mil in 2022.
“This 107.3% increase in PBT year-on-year is primarily due to the 2023 water rate review for non-domestic water consumption,” Chow said.
PBAPP chief executive officer K. Pathmanathan said the company would focus primarily on implementing major water supply engineering projects this year to meet the state’s increasing demand for water.
“Four projects costing RM221mil are planned, with Package 12A at the Sungai Dua WTP to increase maximum water treatment capacity to 114 MLD costing RM31mil, which will be completed by September.
“The RM18mil construction of the Sungai Perai River-Crossing pipeline will commence by September. It’s a long-term solution to replace the burst 1.35m underwater pipeline to upgrade treated water pumping capacity from Sungai Dua WTP to Penang Island.
“The others, namely construction of a 13km pipeline in Butterworth (RM128mil) and a 3.9km pipeline from Macallum Street area to Bukit Dumbar (RM44mil) are both expected to start at the end of this year,” he said.
Addressing frequent unscheduled water supply interruptions reported last year, Pathmanathan said they were mostly due to ageing pipes that burst when the pressure was too high.
“When we increase the pressure (to deliver water to end-of-line users), it can lead to old pipes bursting.
“About 60% of our assets are ageing, over 30 years old, so pipe replacements need to be done parallel with the upgrading of water treatment plants,” he said.
