Wrong to raise water tariffs based on NRW reduction

The announcement that the water tariffs in Selangor, Federal Territory and Putrajaya would be raised by 15% for users consuming more than 20 cubic meters per month would not go down well with the affected populace, "Water to cost more soon" (Sunday Star, Oct 15).

I am a proponent that the current tariffs, which is dirt cheap, should be raised significantly especially the third block (exceeding 35 cubic meters per month per household) in order to encourage water conservation.

But I totally disagree that the tariff revision should be based on the reduction of non-revenue water (NRW).

NRW is that amount of treated water put into the supply system that earns no revenue. It is caused by pipe leakage, reservoir overflow, under recording of meters, illegal connections and legal non-metered supply like fire fighting and pipe flushing etc.

Reduction of NRW should be one of the main corporate objectives of all water supply concessionaires because the amount of water saved can be used to supply new consumers to generate extra revenue. Also, the reduction of NRW will help to defer capital expenditure to develop new sources of supply.

In short NRW reduction is one of the yardsticks to gauge the performance of the water concessionaire.

If NRW is used as a criterion to revise water tariffs, what about improvement of water quality and services, which the consumers are more concerned with?

It would be more appropriate that the tariff adjustment be based on the increase in cost of power, chemicals, salaries and the effect of inflection.

It is hoped that under the new Water Services Industry Act, the terms of the current concessionaire agreement would be amended to take all these into the account.

An edited version of the above was published in The Star on 19/10/06.

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