PUAS is barking up the wrong tree

The arrogant attitude shown and the irrelevant explanation given by Dato Mohd Sinon, the CEO of Puas, on the high water tariff imposed on water supply to Greenview Apartments as repoted in local press did not go down well with the affected residents as they are not to blame for Puas' losses which run into hundreds of millions.

Interpretation problem of the tariff code aside, he categorically stated that, as Puas paid 82 sen per cubic metre (/m3) of treated water to the suppliers, it could not sell it for 70 sen/m3, which the residents of Greenview Apartments were demanding based on their interpretation of the tariff code.

Taking it from there, even at the rate of RM1.20 which Puas is charging the residents of Greenview Apartments, Puas' operations would still be very much in deficit after taking into account losses due to Non-Revenue Water (NRW) and the costs of water distribution and billing.

Consider NRW alone, which is over 40% of supply, the cost of water reaching consumers' taps would amount to RM1.37/m3 (82 sen divided by 0.6). If we include Puas' own operational costs, the cost of water will be much higher than 82 sen.

And based on the current water tariff structure, the average water tariff for domestic supply in Selangor is 72 sen/m3 and for industrial supply is 191 sen/m3. The weighted average water tariff is worked out to be 107.70 sen/m3 (72 x 0.7 + 191 x 0.3). This weighted average tariff is 27% less than the cost of treated water after taking into account only the loss of revenue through NRW.

It is no wonder that Puas is facing a deficit of up to RM400 million annually, and is in arrears of RM1.2 billion owed to privatized water treatment plant concessionaires.

Dato Mohd Sinon also stated that the Selangor water tariffs are low compared to electricity rate. Unfortunately he was comparing oranges with apples. According to the statistics published in Malaysia Water Industry Guide 2003, the Selangor's average tariffs for domestic and industrial consumption in 2001 are ranked second highest Malaysia.

In Penang, where water tariffs are amongst the lowest in Malaysia, the state water supply company, Perbadanan Bekalan Air Pulau Pinang, has been able to make profits all these years.

Dato Mohd Sinon attributed the annual deficits to high costs of constructing water treatment works. This is pulling the wool over the public's eyes.

In fact, one of the major factors that cause Puas' huge annual deficits is the privatisation of more than 30 water treatment plants. The Selangor Government, by the terms of the concession agreements, is purchasing all treated water from the concessionaires at a prohibitive price.

So, who is to take the blame for Puas' annual hefty deficits? One wonders why the Selangor Government has set up Puas as a corporation to do a losing business.

Finally, the straw that broke the camel's back was Dato Mohd Sinon's uncompromising stance on the issue as he told the residents of Greenview Apartments to refer the matter to the courts if they were not happy with the tariffs.

It is hoped that the Resident Association of Greenview Apartments would not only just do that but also take up the case against Puas for supplying water that is not wholesome and not fit for human consumption.