‘An increase in tariff will help IWK cushion its financial and operational sustainability,’ said IWK chairman Ahmad Johnie Zawawi.
IN curbing the unprecedented Covid-19 pandemic, many businesses were forced to close their shutters for good, while some are trying to recuperate from the losses they suffered during the movement control order.
In the midst of the uncertainties faced by all of us, there are a few certainties that stirred our attention in the sewerage sector.
The first certainty was that the environment had become cleaner with better quality rivers. In a news report, Global Environment Centre (GEC) River Care programme manager Dr Kalithasan Kailasam said that better water quality could be seen in many rivers following the significant drop of human and industrial activities during the MCO.
This occurrence could not have been more welcomed in commemoration of the recent World Environment Day, celebrated on June 5.
IWK continued its operations throughout the MCO period.
During the initial MCO period, Indah Water Konsortium (IWK) along with other frontliners and essential service providers continued to operate. All 8,146 of IWK’s sewage treatment plants (STP) and network pumping stations (NPS) were fully operational to ensure preservation of the environment and public sanitation.
At a time when other businesses were not in operation, the quality of environment and rivers saw improvement, demonstrating the compliance with the high standards stipulated by the Department of Environment (DOE).
This resulted in treated effluent that was safely released into waterways without causing harm to the environment. While it strains the STPs to consistently produce quality treated effluent, it is necessary to ensure that the environment and communities are cared for.
The task of balancing operational expenditure with quality of service provided to customers is indeed an arduous one.
As new sewerage assets undertaken by the Government are handed to IWK for operation and maintenance, coupled with ageing assets and higher compliance standards, operational expenditure will incontrovertibly increase.
This leads to the second certainty – IWK continues to explore methods to drive down operational costs, while providing quality service to its customers nationwide.
With the support and contribution from customers, IWK can continue to protect our environment and public health.
Since 2015, IWK was able to reduce operational expenditure in the face of increasing number of assets under management, maintaining a good level of service to customers and higher compliance rate of discharge effluent by STPs.
Furthermore, the cost of operation per household stands at RM18, which is 125% higher than the RM8 per month that customers are paying. The Government subsidises the shortfall suffered by IWK for the people, but there is a need to free up resources so that the allocation can be put to better use elsewhere.
The fact is sewerage charges in Malaysia is one of the lowest in the world, compared to the sophistication of service provided. For every m³ of water treated by IWK, customers are paying less than 30 sen.
However, the charges has not been revised for more than 25 years since the national sewerage company began its operation.
As businesses are allowed to operate in stages to drive economic progress, there are news reports of business owners considering price increase for products and services to keep their businesses afloat after suffering a major blow during the MCO.
The MCO period that was in effect only for a few months has driven businesses to take steps to balance out the margin in revenue for business preservation.
Other IWK initiatives include waste-to-energy projects (reuse of bio-solids for renewable energy generation), development of water reclaim business, and management of fat, oil and grease (FOG).
While the fate of many businesses remain uncertain, our national sewerage company is also stuck in a dire position as it has never increased tariff since its inception.
The gradual impact on the company’s financial and operational sustainability grows detrimental with the passage of time.
The crucial aspect underlining the entire situation is that IWK needs the support and contribution of its customers to preserve the environment for our current and future generations.
Realistically, there should be a review to increase sewerage charges to enable our national sewerage company to cushion its financial and operational sustainability.
At the same time, IWK is also implementing other initiatives to improve its position through other businesses such as waste-to-energy projects (reuse of bio-solids for renewable energy generation), development of water reclaim business, and management of fat, oil and grease (FOG).
As vital as it is for tariff adjustment to be made, the Government subsidy should be channelled directly to the B40 customers, perhaps via the e-Kasih programme.
IWK customers who are eligible under the Government’s e-Kasih programme can obtain reduction and assistance.
As such, for IWK to sustain its operations and financial sustainability, the current tariff needs to be rebalanced. The adjustment made to the sewerage charges will enable both IWK and its customers to continue protecting our environment and public health.
For more information, visit www.iwk.com.my
Ahmad Johnie Zawawi is chairman of Indah Water Konsortium.
