Thursday, June 29, 2006

Klang Valley Folks Beware. Water Tariff Hike Beckons.

The Energy, Water and Communications Ministry is still looking into Puncak Niaga Holdings Bhd's request for 15 per cent water tariff hike, its minister Datuk Seri Dr Lim Keng Yaik said. Puncak Niaga submitted the proposal for 15 per cent tariff hike for various categories to the government in November last year with the increases supposed to be put in place on Jan 1, 2006, under an earlier concession agreement.

The company via its 70 per cent owned subsidiary, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), holds the water supply concession for Selangor besides supplying treated water to Kuala Lumpur and Putrajaya. However, to date, the government has not made any final decision on the request, which if approved, will affect more than seven million water consumers in the Klang Valley. "The ministry is still looking into it. No decision yet," Dr Lim told Bernama when contacted here today and refused to give any hint when the government would make the final decision.

He was asked on the comment by Puncak Niaga's executive chairman Tan Sri Rozali Ismail yesterday that the company deserved the hike as it has been working very hard. The company on numerous occasions had highlighted its request for the hike under the agreement but government replied that there was no automatic increase if the concessionaire failed to meet the benchmark set by the government.

It was not immediately known what is the benchmark but some analysts believed that this has to do with reducing the non-revenue water which is considered high at 40 percent now.

Last month, the Selangor state government said it would study how far Syabas has succeeded in reducing water loss before it considered the company's request for a tariff increase. Selangor Menteri Besar Datuk Seri Mohamad Khir Toyo said the privatisation agreement with Syabas required the company to reduce non-revenue water before it could raise its rates.

However, Rozali claimed that the company has succeeded in reducing non-revenue water to 34.8 per cent from 42.7 per cent last year. Some analysts believed that under the concession agreement, Syabas is entitled to compensation in the event the government fails to allow it to raise water tariffs.


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7:33 PM GMT+8  

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