
Water Tariff Increase?
Recently, we were surprised by the announcement of a water tariff increase of 22 cents per cubic meter starting February 1, 2024. Many questions arise in conjunction with this news. However, it must be understood that the increase in water tariffs is an issue that cannot be avoided by any governing body.
The increase in water tariffs is not done arbitrarily. In Malaysia, water tariff increases can only be made after approval from the National Water Services Commission (SPAN). SPAN plays a crucial role in determining water tariff increases by considering the interests of the two main parties, the water companies, and water consumers.
Reasons For Water Rates Increase
The main reason water companies apply for a tariff increase is to finance CAPEX investments, such as repairing and replacing aging water pipes. If these pipes are not replaced, it can cause leaks and water supply disruptions.
Impact On Users
At first glance, consumers may feel burdened by the water tariff increase. However, if the water tariff is not increased, consumers will also feel the negative effects. For example, water supply disruptions due to aging infrastructure and pipes that are not replaced.

Are they Burdensome?
The average water tariff increase is 22 cents. However, the cost of treating water in Malaysia is actually higher than that, amounting to 75 cents per cubic meter. So, even with an increase, consumers are still getting treated water at a price lower than the actual cost.
Water Company Debts
For example, there are water companies in Malaysia that owe as much as 35 million to TNB. With the existing tariff rate, they are unable to pay off this debt. If the water tariff is adjusted, they will be able to pay off the debt and make capital investments.
Overall, the increase in water tariffs is a necessary step to ensure a continuous and quality water supply. Although there is an increase, it is still at a rate that is not burdensome to consumers. If there is no tariff adjustment, it will trigger a vicious cycle where water companies are unable to pay off debts and make capital investments, and consumers will ultimately suffer.