35% water tariff rebate for Penang construction sector sends wrong signal

The PBA’s decision to reduce the proposed tariff hike for the construction sector by 35 per cent sends a wrong signal. It was only recently that it was announced that water tarrifs would be hiked to encourage conservation and avoid rationing in the light of declining water levels at dams.

Instead of the original proposed tariff of RM3 per 1,000 litres (up from the present RM1.52) for the construction sector, the rebate would revise the new tariff down to RM1.95.

On 1 September 2013, the water conservation surcharge for domestic consumers was hiked from 24 sen per 1000 litres to 48 sen for consumption above 35000 litres per month. Back then, the PBA said the subsidy for domestic users was unsustainable and the hike was needed to promote conservation.

In April this year, in the light of the then dry spell, further tariff hikes were proposed as follows:

So how can the PBA afford to subsidise the construction sector now by reducing the RM3.00 proposed to RM1.95? Aren’t the big property developers and contractors making enough money from soaring property prices? Don’t we have enough construction in Penang Island as it is? Isn’t the place so overbuilt already?

Aren’t we supposed to be encouraging water conservation in view of anticipated future supply constraints and with increased uncertainty following the onset of climate change?

Or does the need to conserve water only apply to the ordinary person on the street?

The rebate should be scrapped and the original proposed increase should stand.

Press Release by Ir. Jaseni Maidinsa
General Manager, Perbadanan Bekalan Air Pulau Pinang Sdn Bhd
CEO, PBA Holdings Bhd.

CM: 35% trade water tariff rebate for the construction sector

Tuesday (16/9/2014), PENANG: Perbadanan Bekalan Air Pulau Pinang (PBAPP) will offer a 35% rebate off its proposed new tariffs only for the construction/renovation sector.

This follows the announcement by Penang Chief Minister Y.A.B. Tuan Lim Guan Eng, on 10 September 2014, that this special rebate was to support a conducive business environment for investments, property development and economic progress in the State of Penang.

Y.A.B. Tuan Lim said: “On 30th April this year, PBAPP submitted a water tariff review proposal to SPAN. Under this proposal, the flat rate tariff for ‘Workshed Supply – Building Construction/Renovation’ was to be reviewed from RM1.52 per 1,000 liters to RM3.00 per 1,000 liters.

“After considering an appeal from the Penang Master Builders & Building Materials Dealers Association, we have agreed to review the proposed flat rate to RM1.95 per 1,000 liters for construction works only, and not for other trade category consumers who will be billed a lower average tariff of RM1.36 per 1,000 liters for the first 500,000 liters per month. The RM1.95 per 1,000 liters flat rate for construction sites is amongst the lowest in the country,” he said.

Y.A.B. Tuan Lim noted that the Construction Industry Development Board (CIDB) had approved 160 projects in Penang for the first half of 2014. Amongst these, 25 are government projects and 135 are private projects. In terms of ringgit value, the total projected investment is RM1.985 billion.

Y.A.B. Tuan Lim said other key local and foreign investments involving development and construction projects announced recently include:

A new RM1.05 billion Seagate manufacturing plant in Batu Kawan;

The RM11.3 billion “Penang International Technology Park and Business Process Outsourcing Prime” project – a joint-venture initiative between PDC and Temasek; and

A RM8.0 billion IKEA project.

“We have to ensure that Penang continues to attract profitable and sustainable development projects to keep our economy vibrant. A vibrant economy benefits the people in Penang.

“As such, we agreed to offer this 35% rebate for water supply to construction sites, although it will reduce PBAPP’s revenue,” Y.A.B. Tuan Lim added.

PBAPP will implement this 35% rebate until further instructed.