Raise commercial water tariffs in Penang as well

While all the focus is on Penang’s high domestic water consumption, the Penang trade consumption is often ignored – but businesses enjoying cheap water guzzle 40 per cent of total Penang water consumption.

While the state government rightly calls on Penang’s domestic consumers to reduce their high per capita water consumption, it should also ask Penang trade consumers to curtail their water usage.

 Domestic consumption

2010 – 170.8 million cu.metres

2011 – 167.6 million cu metres

2012 – 173.5 million cu metres (increase of 1.6 per cent since 2010)

Trade consumption

2010 – 114.8 million cu. metres

2011 – 115.6 million cu. metres

2012 – 117.1 million cu metres (increase of 2.0 per cent since 2010)

And while the state says it may review the water tariff for domestic consumers (RM0.31 for first 35000 litres), which is less than half the average tariff nationwide (RM0.66), it should also review the water tariff for trade consumers. In Penang, the trade tariff is RM1.19 for the first 500000 litres compared to RM2.27 in KL. So the trade water tariffs should be reviewed as well. 

After all, why should domestic consumers alone bear the brunt of the tariff hikes?

Proposed water tariff increase: Penang Forum’s response

Penang Forum supports the recent announcement by the Penang Chief Minister, who is also the PBA chairman, that the domestic water tariff in Penang should be raised.

An initial minimum amount of water usage per household or per person can be priced low (to ensure accessibility for all), after which the tariff rates should increase with higher usage. People who use more should pay higher rates. This is done with other utilities such as electricity and by many authorities.

This issue should not be politicised as some politicians have done. Water is the source of life; yet most people take water for granted and it is often wasted until we face a shortage. Penang’s water tariff is the lowest in the country – unfortunately, the usage per person is the highest. The PBA and the State Government have been trying to educate and have appealed to Penangites to use water wisely but to no avail.

Hence using a step-up price mechanism is a good way to encourage people to conserve water. The follow-up statement by the Chief Minister to provide a 60 per cent discount for large households (eight people) may dilute and weaken the original objective as it may only encourage rather than discourage usage in these households. More effective alternatives should be professionally studied and evaluated before a final decision is made.

In addition to a review of the domestic water tariffs, Penang Forum recommends that the commercial water tariffs be reviewed as well.

Commercial water consumption accounts for 40 per cent of total water consumption in Penang, and like domestic water consumption, it has risen during the period 2010-2012.

A quick comparison shows that the commercial water tariff in Penang is significantly lower that that in other cities in the region. It is RM1.19 per 1000 litres (for the first 500,000 litres) in Penang – much lower than in Kuala Lumpur (RM2.27), Singapore (RM3.55), Bangkok (RM1.24), Manila (RM2.52) and Jakarta (RM4.33) (Source: PBA). It is also lower than the Peninsular Malaysia average of RM1.58 (in 2010).

We congratulate the Penang government for recognising the threat posed by climate change. But it is not enough to look at the demand side and build more infrastructure like dams; we must also protect the supply side. About 80 per cent of Penang’s water supply originates from the Ulu Muda forest, the remainder from within Penang. Thus it is crucial for us to protect the forests, water catchment areas and hills of Penang and Kedah. These help to promote condensation, cloud formation and rainfall while reducing rapid surface run-off. We should therefore put a stop to hill land being converted to development use (e.g. ‘Botak Hill’), encroachment and illegal clearing.

The suggestion in a local daily by a member of the public for the PBA and other professional volunteers (not politicians) to explain the reasons for a graduated water tariff increase is excellent and should be taken up. This campaign should be targeted at both the public and the business community.

Penang Forum Steering Committee
7 April 2014