HIGHER INDAH WATER SEWERAGE BILL?
RM8 per month household bill, unchanged in 20 years, not reflecting higher cost
NATIONAL sewerage company Indah Water Konsortium Sdn Bhd (IWK) has been deluged with unexpected higher operating cost as a result of the latest Imbalance Cost PassThrough (ICPT) implementation.
IWK chief executive officer Faizal Othman expressed concern over its finances because of the ICPT and called for a review of the sewerage bill imposed on households, which had remained at RM8 a month for more than 20 years.
He said the surcharge of 1.35 sen per kilowatt hour (kWh) from this month till December would increase its electricity cost to RM257.3 million annually from about RM250 million.
Electricity cost accounts for 31.2 per cent of IWK’s total operating cost.
IWK would not be able to pass on the cost increase to customers as sewerage tariff was regulated by the government, said Faizal, adding that the impact of the ICPT was not anticipated in its operating budget this year.
“With the current tariff, even at 100 per cent collection rate, IWK would still not be able to cover its operating cost. That is why IWK believes the bigger concern which should be addressed is the review of the sewerage tariff to reflect the cost of providing services, whereby customers should be charged according to their actual water consumption,” he told NST Business yesterday.
ICPT allows the adjustment of fuel prices for the electricity sector every six months. Changes in prices of fuel for electricity generation eration are reflected as a varying rate of rebate or surcharge.
The Energy Commission recently announced that ICPT would continue from July 1 to December 31 at an average base tariff rate of 39.45 sen per kWh.
It said due to higher fuel and generation costs for January 1 to June 30, the 1.35 sen per kWh ICPT surcharge had to be imposed on non-residential customers.
Faizal said Malaysia’s sewerage tariff was one of the lowest in the world.
“Since our inception in 1994, the tariff has not been increased. Operational cost to treat one household per month is about RM20 but tariff is only RM8 per month. The government has been providing subsidy all this while.
“Since 2001, IWK has received an accumulative subsidy of RM2.41 billion. Based on the Consumer Price Index and inflation, RM8 as at the end of 1994 was equivalent to RM14.38 as at December last year. In general, IWK is concerned about the ripple effect of electricity cost increase to the economy,” he added.
Faizal said a practical mechanism would be tariff rebalancing via volumetric tariff.
He said high consumption of electricity was caused by high technology processes and equipment to ensure optimum standard services and effluent discharge.
“IWK has implemented energysaving initiatives but our operating cost is still increasing, mainly due to high electricity consumption from unrationalised wastewater treatment plants.
“Other factors are the abolition of special industrial tariff for sewerage plants, theft, vandalism, illegal connections, sewage overflows, and sewer damage and collapse,” he added.