keeping track of the malaysian water reforms

C o n t e n t s

PresidentIr. Syed Mohd Adnan bin Mansor Alhabshi

Deputy PresidentYBhg. Datuk Ir. Abdul Kadir bin Mohd Din

Vice PresidentsIr. Mohmad Asari bin DaudIr. Zulkiflee bin Ab Hamid

Immediate Past PresidentMr. Ahmad Zahdi bin Jamil

Hon. Secretary GeneralMr. Mohamad Hairi bin Basri

Hon. Treasurer GeneralMdm. Amy Yew Sze Kiat

Ordinary Council MembersProf. Ir. Mohamed Haniffa bin Hj. Abdul HamidDr. Norhayati binti AbdullahIr. Hj. Noor Azahari bin Zainal AbidinIr. Beh Hong Lin Ir. Ong Guan Hock

Ir. Tham Yee KiongMdm. Hjh. Fadzilah binti Abdul KadirMr. Mohamad Sabari bin ShakeranMr. Mansor bin Abdul GhaniMr. Shamsul Fahmi bin Mohamad PadzliMr. Desmond Lim Meng Keat

MWA Council for 2015/2017 Session

The Malaysian Water Association (MWA)No. 24 Second Floor, Jalan Sri Hartamas 8, Taman Sri Hartamas, 50480 Kuala Lumpur, MALAYSIA.Tel: +603 6201 2250/9521 Fax: +603 6201 5801 Website: www.mwa.org.my

DisclaimerThe Malaysian Water Association (MWA) quarterly bulletin (“Water Malaysia”) is provided as a service to our members. The articles written by various authors and news from external sources are published in good faith for the benefit of our readers and do not necessarily reflect the views of MWA. Further, we give no assurance or warranty that the published information is current or accurate and take no responsibility for any losses or consequences arising from its transmittal through the bulletin.

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President’s Desk 2

Cover Feature 3

• The Bigger Picture: Background and Progress of the Water Reform in Malaysia

Special Feature

• Keeping Track of the 6 Malaysian Water Reforms

• Remembering the Late 8 Tun Dr. Lim Keng Yaik

• Chronology of Assets Transfer 9 and Restructuring

• The Ministers Involved with the 10 National Water Reform Initiatives

• Shaping the Water 11 Regulatory Agenda

• Views from the Water Utilities 14

• How It All Began… 15

• Malaysia’s Water Reform: 16 The Challenges Continue…

• PAAB – A Key Player 18 in Water Reform

• Water Reform – 20 Outlook and Directions

• In A Nutshell – 21 Water Reform in Malaysia

• What’s Happening in 22 Wastewater Reform

MWA Upcoming Events 25

MWA Activities 26 - 33

Featured Articles

• Four-in-One Concept in 34 Project Implementation for the Construction of Kahang Dam

• Sungai Dua: Penang’s 40 Most Highly Evolved Water Treatment Plant

Young Water Professionals 43

• YWP Conference 2016, Sydney

News Snippets 44

Editorial Committee MembersIr. Syed Mohamed Adnan AlhabshiIr. Ong Guan HockMr. Lee Koon YewMs. Rubby Mahmod

2 Water Malaysia

It is my pleasure to record that the year 2015 ended on a high note for MWA. Besides the very well received Water Malaysia Conference and Exhibition 2015 in April 2015, MWA, also organised the Borneo Water & Wastewater Exhibition & Conference 2015, (or BWWE 2015). BWWE 2015 was a resounding success with about 400 delegates and 40 exhibitors showcasing their latest technologies and services. It was held at the Borneo Convention Centre Kuching (BCCK) from 14 to 16 December 2015. On behalf of the Association, I would like to acknowledge the strong support of the Sarawak State Government and the many generous sponsors for the event. The BWWE 2015 was jointly organised with the National Water District Engineers Action Committee (JTJAD) and we are very delighted to note that the partnership had been a fruitful one.

In conjunction with the BWWE, the Protem Committee of the MWA Sarawak Branch was officially launched by the Sarawak Minister of Public Utilities,

Dato’ Amar Haji Awang Tengah. The Protem Committee comprise of Permanent Secretary of Ministry of Public Utilities as Advisor with Mr. Mohamad Sabari Shakeran of Kuching Water Board as the Chair. It has eight members. We are confident that with the setting up of the Protem Committee, MWA will be able to serve our members in Sarawak and Sabah better and facilitate the sharing of knowledge and experience to uplift the water and wastewater services in the two states.

On another note, the media these days are awashed (the pun is intended) with daily reports on the effect of the dry and hot weather. News on the threats to our water supply is a daily feature with reports on the depleting level of the country’s dams, impending water crisis and water rationing, etc. if the dry weather persists. It was reported that the almost unbearably hot and dry weather brought about by El Nino is expected to abate by June 2016. Meanwhile, water rationings were already announced for some critical areas and all water operators are on standby to face the biggest water shortages since 1998.

This year 2016 also marks the twelfth year, when Malaysia took the bold step to reform the water industry country-wide beginning 2004. This involved amending the Federal Constitution to take the power away from the States to the Federal level and promulgating two pieces of legislation to set up a national regulatory body with the corresponding enabling legislations. In the past, the provision of water services has been regarded as a social obligation with little regard to the economic sustainability in the long term. The development of water infrastructure has not kept up well with the economic progress and urbanization. Quick fix solutions such as ad hoc privatization have presented more problems than can be solved. The concept of reform was to address the two fundamental issues of raising much needed funds and driving efficiency.

In this issue of WATER MALAYSIA, we take a global look at this important milestone in the Malaysia water industry. Several personalities in the water industry share their thoughts and views on how we have progressed along the reform roadmap, a peek at what has changed and reasons why the state’s water restructuring were not completed, among others. We hope the readers will be kept updated on the progress so far. There are key lessons to learn of the reform to date and both the government and stakeholders have to address the issues head on, as the industry seeks to consolidate and address difficult challenges particularly in the area of economic and social regulation, going forward into the next decade.

The MWA 28th Annual Dinner & Awards Night 2016 will be held on 2 June at the Hilton Kuala Lumpur. The Minister of Energy, Green Technology and Water and the Minister of Education will be the Guest of Honour. There will be “MWA Green Talent Award” for the schools, “Best Treatment Plant Award for Water & Sewerage Industry” and “MWA Water Award for Management/Research”. We hope to see all members at the Dinner and again enjoy the camaraderie among friends in the water fraternity and making new acquaintances.

Thank you.

P r e s i d e n t ’ s D e s k

Ir. SYED MOHD ADNAN ALHABSHIPresident

MWA extends our condolences to the family of the late Ir. Low Chee Par who passed away peacefully on 8 April 2016 after a short illness. Ir. Low had been the Director of JKR Water Supply Branch as well as the Director General of Water Supply Dept., Min. of Energy, Water & Communications from 2004 to 2006. He served as MWA Council Member since 1993 to 2005 and was the Vice President of MWA from 1999 to 2003.

Condolences

The Water Reform Journey...

Apart of continually investing in infrastructure development, we are currently implementing

institutional and structural reforms to elevate the Malaysian water management gradually to

a world standard status. Today, I would like to take this opportunity to share our progress in

restructuring our water industry.

More than a decade ago, Malaysia began its journey towards restructuring of its water services

industry due to the pressing need for long-term sustainable water solutions. The Malaysian

water services industry, like those of many developing countries, was suffering from rising

costs with unsustainable water tariffs and poor services. The industry was operating as a

state-run entity, fragmented and unsustainable, requiring huge capital infrastructure and

plagued with high non-revenue water rate.

3Water Malaysia

Background and Progressof the Water Reform in Malaysia

Datuk Loo Took Gee, Secretary General of

Ministry of Energy, Green Technology and Water,

sharing some of her thoughts on the background

and progress of the Water Reform in Malaysia.

C o v e r F e a t u r e

THE BIGGER PICTURE

4 Water Malaysia


Basic Concept of the Reform...

The concept of reform introduced was based on the

asset-light model. Under this model, the liabilities of

the water operators are taken over by a water asset

management company which is fully-owned by the

Federal Government. In return, the state governments

will transfer their water assets to the water asset

company for a period of 30 to 45 years and the states

will then have to pay lease rental to the company. The

asset transfer tenure is crucial as it determines the

annual amount of lease rental payable to PAAB and

reflects the tarif fs to be paid by the consumers.

Currently, with the conclusion of the Selangor water

restructuring, 7 out of 12 states have restructured

their water industry and subscribed to the reform

scheme. The biggest challenge is to strike a balance

between the sustainability of the water operators and

imposing reasonable water tarif fs to the consumers.

With some states having huge liabilities, the balancing

act needs other financial considerations and we,

at the federal level, have to find ways to assist the

states in achieving that balance.

Some Fruits of the Reform…

Going into the twelfth year of transforming our water

industry, we are now enjoying the fruits of the reform.

We have seen an improved performance especially for

the states that have restructured their water services

industry. This is reflected in the reduction in non-

revenue water and therefore, an increase in income

of water operators and improvement in efficiency and

reliability of water supply services.

These achievements can be attributed to the licensing

initiative where water operators are required to

achieve certain standards and key performance

indicators set by the regulator called the National

Water Services Commission or SPAN. With all these

shifts in the water industry, we must be very clear that

all the initiatives will only be successful if coupled

with the right skilled manpower within the industry.

Key Success Factors…

Besides capacity building and the promotion of

science and technology in the industry, key success

factors in reforming the water service industry include

sufficient financial allocation and a strong political

will, especially when the water industry restructuring

exercise in Malaysia involves both the Federal and

State Governments.

5Water Malaysia


Therefore, handling the political economy of the

water services industry is crucial, whether it is

within a nation or with neighboring nations. It is

not just dealing with resource economics, science

and technology, governance, laws and regulations

or issues on the environment; it requires complete

ecosystem realignment and careful handling of the

dynamic nexus of the whole systems.

Positive About the Future of the Reform…

We still have a long way to go in our reform journey.

Achieving full cost recovery and capital expansion are

still our biggest challenges. However, given the right

time and strategies, we are positive that the goals of

the reform can be attained. Our model may be useful

to other countries.

By improving water use, making water infrastructure

and water delivery system more efficient and more

secure as well as conserving existing sources while

looking to tap new sources of water, our water will be

safe and available for our future generations. We firmly

believe that this two pronged strategy will enable us

to gain a world class water management status that

embraces greener technology for a sustainable future

in years to come.

Note:The above were abstract of the keynote address by Datuk Loo Took Gee at the ABB-MWA Water Colloquium held on 15 September 2015 in Kuala Lumpur – with permission.

“By improving water use, making water infrastructure and water delivery system more efficient and more secure as well as conserving existing sources while looking to tap new sources of water, our water will be safe and available for our future generations...”

6 Water Malaysia

2004 – Start of Water Reform Journey

The journey to reform the Malaysian water industry started in August 2004 initiated by the then Minister of Energy, Water and Communications, the late Tun Lim Keng Yaik. The study examined the various water regulatory models around the world from the UK, Netherlands, Denmark and the USA to Australia. All these countries were developed with sustainable tariff structures.

Malaysia is still a developing country and the water tariffs are low. The issues and challenges are different and beyond economic aspect but yet, we had to devise a strategic model that will take us to long term sustainability. The developing countries and emerging countries were facing similar challenges as us and there was no long term sustainability in sight for the country as a whole. There were some well promoted successes by the Asian Development Bank in the form of Manila Water in the Philippines

and Phnom Penh Water in Cambodia but none of these claimed successes address the water industry for the country as a whole.

Both Manila and Phnom Penh are the urban capital of their respective countries. The continued sustainability of the urban area that comes with increasing infrastructure needs and corresponding increases in the water tariff will gradually result in greater disparity of development of the water services industry between these urban areas and the rest of the country, particularly the rural areas. Malaysia wanted to address the water reform for the country as a whole, whether rural or urban areas. It was clear we had to devise a model of our own.

Reform for Long-term Sustainability

Like in many countries, water services are often left to the responsibility of the local council, municipality or State and in the case of Malaysia, water supply

services came under the respective States as encapsulated in the Federal Constitution then. To address the water reforms for the country as a whole, we managed to work to amend the Federal Constitution to cede the regulatory power of water supply services from the States to the Federal Government. The Federal Constitution was successfully amended beginning 2005. Following that, we worked to propose to reform the water and sewerage services industry that would take us to long term sustainability. The challenges we faced at that time :- • The water tariffs were low and were not sustainable.• The water services were subsidised and if not well addressed, would result in growing subsidy.• At the same time, there was growing demand for increasing water supply capacity as the economy grew.• The gap between a sustainable tariff and the existing tariff was huge.

S p e c i a l F e a t u r e

Keeping Track of theMalaysian Water ReformsBy: YK Chin1Dr YK Chin was the lead consultant on the project in reforming the water industry and has been actively involved in the implementation of the reform until now. YK was requested by the Minister to author the book entitled, “The Water Tablet: Malaysian Water Reforms”.2Excluding Sabah and Sarawak which had the option to remain status quo.

WATERREFORMS

7Water Malaysia


• We needed to buy time to increase tariff but the need to invest in replacing old leaking pipes and building capacity could not wait. • Public funds were limited to continue the subsidy.

Eventually, we devised an acceptable model that received buy-ins from the respective State Governments, NGOs, consumer groups and the Federal Government. The key feature of the model was the formation of a water asset holding company that is wholly owned by the Ministry of Finance that can raised long term funds from the capital market to fund water infrastructure development without sourcing funding needs from public funds. This water asset holding company known as PAAB, allows the various State water operators to buy time to reform and migrate to the new water regime and gradually increase tariff to sustainable levels.

Formation of SPAN and Migration to New Reform Model

The reform model was empowered by the promulgation of the Suruhanjaya Perkhidmatan Air Negara (SPAN) Act 2006 and the Water Services Industry Act (WSIA) 2006.

SPAN was set up as the national water commission, which is empowered to regulate the water supply and sewerage services industry based on the enabling WSIA. Thus, the journey to reform the water and sewerage industry effective began following the establishment of SPAN.

We had expected the migration to the new regime within 5 years and set their path towards long term sustainability within 30 years. Some States were expected to be economically sustainable within 10 years but none were expected to take more than 30 years. We have now travelled almost 10 years down the road of reform and I must say that the journey has not been as smooth as anticipated.

The migration to the new regime has not fully taken place. Migration to the new regime would entail the consolidation of water treatment and distribution holistically with funding sourced from PAAB. Selangor has yet to be fully consolidated although progress has been made. Perlis and Pahang have yet to rollout the plan of sustainability with tariff revision and sourcing funds from PAAB. Labuan water has yet to be corporatized. There were various causes for the delay ranging from political reasons to lack of management resources.

The delay in full migration has led to the delay in setting water tariffs towards economic sustainability. Leaking pipes replacement have been delayed. SPAN has worked out a comprehensive tariff setting mechanism which is being rolled out. This is a key initiative that needs comprehensive implementation that sets the roadmap for each State water company towards financial independence. It is on this basis that PAAB can fund the infrastructure replacement and development of the States and correspondingly raise funds from the capital markets.

Integration of Water and Sewerage Services

The integration of water and sewerage services have yet to take place. The model of offering sewerage service by IWK is unique. It is financially unsustainable. The fees charged are insufficient to cover even operating costs. It is hard to get consumers to appreciate a service that cannot be seen, feel or touch. I guess the only time consumers appreciate IWK is when they do a bad job.

Sewerage service has to be integrated with water services as happened in developed countries and even some developing countries. Furthermore, the integration will recognise the water cycle of consumption from sourcing raw water from the river basin to get it treated, distributed, consumed and safely discharged back to the source.

Whilst we have well recognised the water cycle of consumption, the integration of water and sewerage services have yet to be initiated.

What have we learned from this?

The water and sewerage services industry must be independently managed free from political influence. Whilst the water services industry has in the past prior to reform in 2006 were regulated by the State Government when tariff was minimally increased to avoid political backlash, the regime today has to progress beyond politics.

Water services should be supplied to meet socio-economic objectives and this is now well regulated by SPAN, a socio-economic regulator. Similarly, SPAN should also be free from political influence. Until now, most of the State water supply companies are chaired by the Chief Minister or Menteri Besar from both sides of the political divide. There is a need for SPAN to improve on the governance of the water companies, starting with the board composition of the water companies.

I believe that with the water reform in place and the industry well regulated by SPAN, the water and sewerage services industry is then left to be professionally managed and independent from the political masters, the industry will progress well towards long term sustainability. The consumers will get better services, albeit tariff will increase at an acceptable level. Performance standards will be set and tariff setting made transparent. The Government will gain with reduction of subsidies and grants, taking the strain away from public funds.

It is time for us to hasten up the completion of the reform. Whilst we did not expect the journey to the reform to be smooth, we did not expect it to be this rough.

8 Water Malaysia

Tun Dr. Lim Keng Yaik retired as Minister after the 2008 General Elections. The water industry was fortunate to have the late Tun Lim coming in with the right timing to become the Minister in charge of water to helm the national water reform plan. It was his visionary leadership and skill that steered the water reform agenda through some rough waters. Many issues were expeditiously addressed and resolved under his guidance and thus began a new chapter in the transformation and streamlining of water services management in Malaysia. When he retired after about four short years at the helm, the late Tun had already left an indelible mark in Malaysia’s water reform journey...

The water industry will always remember the late Tun Dr. Lim Keng Yaik, who was politically respected, always passionate about what he did and stood his ground for what is right, not forgetting his witty style of address, or as Dato’ Brother Vincent Corkery, then Brother Director of St Michael Institution, Ipoh (his alma mater) described it, “a forthright style of expression but invariably getting the message across”.

We knew it is not easy to get all states to agree to central control of water industry, but Tun Lim managed to do it. We all realised to be successful in any undertaking we need a mover. Tun Lim is the true champion as far as water industry is concerned.

Remembering the Late

Tun Dr. Lim Keng Yaik(8 April 1939 – 22 December 2012)

Visionary and Prime Mover Par Excellenceof Malaysia’s Water Reform


Tun Dr. Lim Keng Yaik assumed his portfolio as the Minister of Energy, Water and Communications in 2004. He laid the foundation for the water reform process which had since been built on and enhanced by his successors in office. During that time, he focused on the important and urgent issues in the industry as he kept reminding the industry players to buck up and provide the services as promised to the people and be up to par. He successfully guided the restructuring of the water industry of the country.

Water Revamp Likely to be Concluded by October

KUALA LUMPUR: The Government is committed to the water reform agenda that was initiated in 2006 and remains focus to solve the Selangor water restructuring this year. “Perhaps the most difficult one has been the Selangor water case. We are now in the last lap and Kettha remains focused to solved the Selangor water restructuring by 2016,” said Energy, Green Technology and Water Minister Datuk Seri Maximus Johnity Ongkili in his opening speech at the Asia Water 2016.

He disclosed that he had been in talks with the Selangor state government and there were a “couple more matters” to be ironed out.

The only water concessionaire yet to be acquired by Selangor is Syarikat Pengeluar Air Sungai Selangor Sdn

Bhd (SPLASH) which asked for RM2.8bil for its assets. Under the master agreement signed between the state and federal governments, RM2bil was allocated for the acquisition of all water concessionaire companies in Selangor.

The RM2bil cash was secured via the pledging of an equivalent worth of assets held by Air Selangor as collateral. The bulk of the funds, or some RM1.55bil, went towards acquiring Puncak Niaga Sdn Bhd and Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS). This leaves Air Selangor with RM450mil to fund the acquisition of Splash.Air Selangor chief executive officer Suhaimi Kamaralzaman, in a report last October had acknowledged the limited funds relating to the acquisition of Splash, but he did not rule out the possibility of future cash injections.

9Water Malaysia

Under the water restructuring initiative, Syarikat Air Melaka became the first State to transfer the state-owned assets, valued at RM889m to PAAB on 17 December 2008. On 20 January 2009, Negeri Sembilan became the second state to transfer its state-owned assets to PAAB, valued at RM1.21b. The third transfer of assets took place on 11 March 2009 where Johor became the first private concessionaire to migrate to the new licensing regime. A total of RM4.03b of assets were involved.

Perlis became the fourth State to transfer its state-owned assets to PAAB worth RM203m on 2 August 2010. This was followed by Pulau Pinang which transferred RM655.2m assets to PAAB on 2 June 2011. On 23 May 2012, Perak became the sixth State to migrate to the restructuring initiative when it transferred RM999.2m worth of assets to PAAB. In July 2015, Puncak Niaga and SYABAS was acquired for RM1.55b.

Historic Moment of Water Reform


Chronology of Assets Transfer and Restructring

When YB Dato’ Seri Lim Ken Yaik as Minister of Energy, Water and Communications, KTAK (seated right), in response to the speech by the President of MWA Dato’ Ir. Syed Muhammad Shahabudin (seated left) pledged to YAB Dato’ Seri Najib Razak, the Deputy Prime Minister (seated centre) to transform the water services industry in Peninsular Malaysia in 3 years: which YB Dato’ Seri Lim Keng Yaik did within 3 years when SPAN was formed in April 2007. This historic event was witnessed by Dato’ Shaziman Abu Mansor, the Deputy Minister of KTAK (standing behind Dato’ Seri Lim) and Mr. Lee Koon Yew, the Hon. Secretary General of MWA (standing second from left) -- taken at MWA Annual Dinner, 28 April 2004, Istana Hotel, Kuala Lumpur

10 Water Malaysia


Datuk Seri Shaziman Abu Mansor : He was the second person to assume

the portfolio of Minister of Energy, Water and Communications from March 2008 to

April 2009. During his short tenure before he assume the portfolio of Minister of

Works, Datuk Shaziman had the unenviable task of engaging the new Selangor State

Government on the water issues following the change of government in Selangor. The

restructuring of water in Selangor involved the State Government, SYABAS, Puncak

Niaga, SPLASH and Konsortium ABASS on one hand and the federal government led

by the Ministry, SPAN (and PAAB) on the other.

Dato’ Seri Peter Chin Fah Kui : Minister of Energy, Green Technology and Water : April

2009 to May 2013. It was during Dato’ Seri Peter Chin’s tenure as Minister that saw the

consolidation and strengthening of the water reform. Many of the Regulations and Rules were

drafted and enforced during this period, and some were enforced later in 2014 and 2015. The

Selangor water restructuring continued to be a bane and remained a great challenge as the

parties involved failed to reach agreement in spite of many false starts.

Datuk Seri Dr. Maximus Johnity Ongkili : Minister of Energy, Green Technology

and Water (May 2013 to present). One landmark event in the water reform plan that

took place during his tenure was the successful conclusion of the long-drawn out water

restructuring in Selangor. This was on 10 July 2015 when Selangor and Putrajaya signed

a supplemental agreement for the state’s water restructuring plan, putting an end to an

impasse that has dragged on for more than 10 months. The National Water Blueprint

was proposed to lend more weight and direction to move the water reform initiatives

forward. The Minister took charge during the water rationing in Selangor that occurred

for an extended period due to drought from February to April 2014. The regulatory

framework were further enhanced with more water and sewerage regulations and rules

being drafted and enforced. The green aspect on the water side were also stepped up,

acknowledging the value and role of water in the environment.

The Ministers Involved with theNational Water Reform Initiatives

11Water Malaysia

1. Changes that would not have been possible without the reform process in place

In broad terms, the following are some significant aspects of the transformation we see today which otherwise would not have come about without the water reform process over the last 12 years.

Governance

Better Governance in place now with corporatization of State Water Departments and registered under the Company Commission of Malaysia (CCM) except for two states namely Perlis and Perak as well as Water Supply Department of Labuan. As corporate entity, water operator is required to submit audited accounts to CCM. Revenues from water supply have ceased to form part of State Government’s consolidated fund as was the case before corporatization.

In addition, all water operators are now licensed under Water Services Industry Act (WSIA) 2006. Their licenses are for three-year and subject to various conditions. Only Water Supply Department of Labuan has not been licensed. WSIA licensing regime requires licensee to comply with the law and serious violations could result in non-renewal of license.

Holistic Structure

Reform has enabled a change from fragmented to holistic structure for the industry for all states. Water supply in Johor and Negeri Sembilan used to have multiple providers for treatment and distribution, is now under one operator. This led to improve efficiency in cost and supply chain management. Selangor and Federal Territories of Kuala Lumpur and Putrajaya will have single operator when Air Selangor Berhad completes its acquisition of SPLASH. Perak and Kedah will soon have one single holistic water operator when the one water treatment concession for

Perak and another water treatment concession for Pulau Langkawi, Kedah, expires in 2020.

Vertically integrated structure also led to more efficient management of water resources as reflected by the water resources management in Selangor now.

Uniformed Water Rules

With the reform, there is now a set of common Water rules which was enforced by SPAN in 2014. This has greatly benefited the housing and real estate developers as all states, except for Sabah and Sarawak, need to follow the same water rules. Similarly, products and equipment suppliers for the water supply industry do not need to obtain approval from all states as SPAN is the only authority for such approval.

Tariff Revision

Since WSIA came into force, Penang, Johor, Melaka, Kedah, Negeri Sembilan, Kelantan and FT Labuan have revised their water tariffs. Previously, before the water reform, tariff revision for some states come under privatization contract and this would have caused a lot of political issues and objections.

Some State governments with privatization concessions with pre-determined rate adjustments would have saddled with huge outstanding payments as they could not have passed the cost to consumers in the form of higher tariffs with current political landscape.

Melaka, Johor and Negeri Sembilan are some examples of benefits of Asset-Light structure with their NRW dropped substantially.

Enforcement

Enforcement actions against water thefts for some states

Dato’ Teo Yen Hua was there when the reform process started in 2004, initially as the Deputy Secretary General Ministry of Energy, Water and Communications. He later became the first CEO of the National Water Services Commission, SPAN, who undertook the responsibility to implement the reform as the national regulator. He provides some insight, personal thoughts and views on his experiences:


Dato’ Teo Yen Hua, Former CEO of SPAN, 2007 to 2014

Shaping the Water Regulatory Agenda

12 Water Malaysia

before the water reform, would be unheard of or not given priority as there is no regulator. Operators have to act as both service provider and regulator which make enforcement difficult. Enforcement action by privatized water suppliers would not be easy due to conflict of interest.

Sewerage Services

For sewerage industry, the number of public sewerage treatment plants not handed over to Sewerage Service provider would have increased to the detriment of house owners. Improvements in sewerage services would not have been possible under previous arrangement. WSIA allow the regulator to appoint certifying agency. All public sewerage facilities when completed must be handed over to public sewerage service provider to operate.

2. Why only some States were able to transfer their assets to Pengurusan Aset Air Berhad (PAAB) under the new asset-light business model

Revenue, Tariff Adjustment and Cost Recovery

The biggest problem facing asset-light water operators is in terms of insufficient revenue to meet their lease rental payment should PAAB proceed with all their CAPEX plans. Water operators could not get approval from their Board of Directors to proceed with tariff review even though they have strong justifications.

Under WSIA the rightful authority to approve any water tariff review lies with the Minister responsible for water services and not the state government concerned. But in practice, many state governments continue to require operator to obtain approval from State political leader and/ or state government before they are allowed to apply to the regulator for any tariff adjustment. In some states, this is further complicated by the fact that the chairman of the Board is also the state political leader.

Personally I do not see how operators from those states that have not adopted asset-light structure could improve their services without a substantial tariff increase or receive subsidies from their respective state government to meet their OPEX and CAPEX programs. Without the remaining states adopting the asset-light model, the industry could not fully benefit from the reform.

Some states are unable to agree to the terms and conditions of asset transfer due to concern that they will have to allow substantial increase in tariffs to meet their lease payments, what more with new CAPEX requirements. There is a need to re-examine those terms if necessary as different states

have different legal, social or financial impediments. There is no one size fits all model.

Timeline to Finalise Restructuring

In terms of time line, I think it has taken too long to finalize the restructuring for some states. As WSIA came into force on 1.1.2008, it is now into its ninth year. I hope the relevant authorities could expedite the process and bring on board states that do not have other option but subscribe to this asset-light model which will benefit all consumers.

Water is life. Thus any reform exercise is not easy. The European Union, for example, issued a directive in 2001 on cost recovery but by 2013, there are only few countries that have successfully implemented cost recovery system. Many other EU countries are still struggling to comply with the directive.

3. A transparent tariff mechanism is essential to ensure reform is sustainable

The existing tariff setting mechanism under the regulator is an interim system and it is an improvement to previous regime before WSIA. A more transparent system based on Regulatory Water Accounts should be implemented to ensure the reform is sustainable. Currently, request for tariff revision though justified and necessary, is still subjected to political delay and interferences. In fact there are cases where new tariff structure was not implemented due to political reasons though it had received approval from the regulator and went through extensive consultations with consumers and other stakeholders.

4. Some unique features of the two water reform laws from drafting up to approval by Parliament in 2006

The industry at that time was lucky to have strong leadership under the Minister and the Secretary General of the Ministry concerned (Ministry of Energy, Water and Communications). The two draft Bills went through extensive public and stakeholders consultations. This was supported by a clear and fair policy by the Federal Government that benefits all stakeholders. The political landscape then was more conducive and did not pose serious constraint to proposals put forward. In total over 100 meetings, briefings and stakeholders engagements were held including dedicated briefings and consultations for Federal and State law makers.


13Water Malaysia

One unique feature is that the Federal Government de-classified the draft bill and allowed it to be uploaded on the ministry’s website for public comments. Changes were done to the draft before final approval was obtained from the Federal Government for the Bill to be tabled in Parliament.

5. Improvement in governance, accountability and public confidence among the operators and consumers following the reform

Generally there are great improvements. However, more could have been achieved if there is undivided support to the reform from all state agencies. Strict enforcement against those operating without license or permits, supplying sub-standard products and illegal connections including those under the state or Federal agencies have improved governance and accountability.

Regulatory requirement to submit performance and compliance reports leads to better service and improve consumers’ confidence. This can be seen from tariff adjustments that have been effected for those states since WSIA came into force. Interestingly enough, since the implementation of WSIA, tariff adjustments by several operators have not met with serious objections. I believe this is due to improvement in public confidence.

6. Absence of corresponding upstream reform a cause for the perennial issues of water shortages, pollution and water interruption that plaque the industry and consumers

A holistic model encompassing water resources would have avoided the current perennial issues on raw water shortages. However if the holistic model was proposed, the reform might not have been possible and could remain on the drawing board. At best, Federal Government could only introduce a model law with no executive powers. Incidentally, many countries having similar political set up as Malaysia do not have executive power and control on water services, let alone water resources. In fact water supply and sewerage services in many developed countries continue to be provided by State Municipals and not regulated by an independent regulator.

On water resources, there is now a proposed Bill for Federal Government to regulate water resources. I hope the relevant ministry will be able to overcome whatever impediments and bring the Bill to Parliament for approval as soon as possible. Meanwhile, I hope the relevant agencies at Federal and state levels involved in water resources could work closely with SPAN and KeTTHA to address issues related to raw water constraints facing the industry. NGOs such as MWA could also play an effective role in getting all state governments to subscribe to the reform. Water is life and therefore for the sake of all Malaysians, it should cut across political divides.


14 Water Malaysia


The creation of the regulatory regime – a right move…

The main intention of water reform is to make the water services industry more efficient in delivering the required quantity and quality of treated water to the consumers. SAJ Holdings for instance, migrated to the new licensing regime in 2009 and has proven itself to be fully sustainable with outstanding operational track record. I believe the same model can be applied in those states-run water operations, provided the implementation and enforcement of WSIA 2006 is fully adhered to. The Asset-light Model under PAAB...

Asset light model allows water service providers to focus on improving their operational efficiency and effectiveness without having to shoulder heavy financial commitments in meeting their infrastructure expansion. SAJH has benefitted from this arrangement with substantial cheaper funding from PAAB, where before the water restructuring, SAJH did not receive the interest-free loans for water from the federal government budget but has to source own funds from the market. We feel PAAB should continue maintain its role in securing cheaper financing cost so it can pass on the benefit to water operators by charging reasonable long-term lease charges so the water operators could minimize the need for tariff adjustment. I also hope PAAB can broaden its financing scope to include works related to Non-Revenue Water (NRW) which require substantial initial investment. This is one of the

long-standing issue faced by our water utilities and which we think should be immediately addressed and included under the new funding model to ensure the success of the water reform. Implementation of the tariff mechanism...

The tariff mechanism has to be robust enough to meet the increasing cost of running a water operation. SPAN and PAAB should a play major role in assisting and supporting tariff adjustment to enable water operators to meet SPAN KPIs and pay lease charges to PAAB. Ideally, water operators should be able to adopt full cost recovery model where tariff charged would be sufficient to cover not only operational obligations but also financing costs and capital investment. More sustained and concerted focus on water issues...

Water is an integral part of life. However, it has not been given proper care and attention where water quality has deteriorated at an alarming rate and water shortage has become more frequent in the past years. A concerted effort needs to be done in order to ensure sustainable water supply. Among others, a holistic NRW programme needs to be in place to capture the readily available treated water wasted in our distribution systems. I also hope the remaining states will migrate to the new regime under PAAB so we could all move in the same direction of restructuring the water industry in Malaysia.

• SAJ Holdings, the operator of the Johor water supply was one of the earliest State utility to migrate to the new regulatory regime under the water services industry restructuring led by the Ministry of Energy, Green Technology and Water.

• Here we have En. Ahmad Zahdi Jamil, CEO of Ranhill Water Services that oversees SAJH which provides water supply services to the entire state of Johor, Malaysia under an exclusive government license, sharing some of his own experience on the impact of water reform in SAJH.

Ahmad Zahdi Jamil, CEO Ranhill Water Services Sdn Bhd

Views from the Water Utilities

15Water Malaysia

The new Ministry of Energy, Water and Communications was formed in 2004 and the policy decision to restructure the water services was made. A Study was soon commissioned and the proposed Bills were drafted, many meetings and discussions were held with stakeholders together with many rounds of public consultations . Briefings were given to Members of Parliament from both sides of the divide represented in Parliament. Intense debate in Parliament followed before the Bills were approved.

Here Dr. Ching Thoo, currently the Secretary of the Sewerage Services Industry Division of the Ministry of Energy, Green Technology and Water (KeTTHA) and who was involved right there in 2004 - 2007, shares with us what took place then…


The Journey…

The journey started in 2004 right after the General Election. The main (if not the only) challenge was to propose the right business model as well as the workable regulatory framework that suit to the Malaysian conditions. But we were fortunate in the sense that the reform in the Communication and Multimedia industry had given us the initial working model to adopt, that of separating the power of policy formulation from regulation and service provision. What we have seen today encapsulates the very basic governance structure we want to achieve in the water sector.

The whole process of reforming the water sector was in itself a painstaking exercise. After countless rounds of brainstorming session and more than 140 consultation sessions with interested stakeholders including the Opposition political parties, painful drafting and re-drafting of the Bills etc., the whole process ended with the tabling of the Bills in the Parliament in 2006.

It was never done before in any public policy formulation in Malaysia (as I could recall) that the public documents were taken publicly for comment. It was an unprecedented move by the authority to uphold the principle of good governance.

To summarise, the water sector reform could be traced back along four important (historical) events: (i) the decision of the 1998 National Water Resources Council; (ii) after 2004 general election; (iii) the commissioning for the study; and (iv) amendments to the Federal Constitution.

Greatest memory of the early days…

Its having had the opportunity to follow through the reform process from the beginning, and the greatest satisfaction

was the witnessing on how the reform proposals were conceptualise and how thought was translated into actions. Exactly in 2 years, thoughts started to assemble into pieces of concrete action plans that finally materialised in the form of two important Acts – Act 655 and 654 – the Water Services Industry Act and the Suruhanjaya Perkhidmatan Air Negara Act. The first national water regulator in this part of the world was then established and we are truly proud of this accomplishment. We hope all the best for the reform of the water industry in Malaysia to be a success.

I can only attribute this success to the great leadership under the Minister then, the late Tun (then Dato’ Seri) Dr. Lim Keng Yaik whose vision, passion and persistence had ensured that all who were involved were fully committed to the task and fully understood the urgency to come up with a good law for the water reform to be undertaken within a period of three years. The task was successfully accomplished led by the Secretary General, Dato’ Dr. Halim Shafie, and all heads of departments and agencies under the KTAK then and other agencies, consumer groups and public officers due to excellent teamwork, dedication and hard work, etc. and for which due recognition is gladly given.

On Reform of Sewerage Services being left behind…

It was not true that the sewerage services was left out from the reform journey, but rather it was given less emphasis. It was the water sector that needed urgent attention to address pressing challenges. On contrary, the sewerage sector had somehow stabilised and the up and well running operator was already in place. What was left is the right business model and stringent regulation. In fact a large section of the WSIA was devoted to the sewerage sector.

Dr. Ching Thoo A/L Kim, Ministry of Energy, Green Technology and Water

How It All Began...

16 Water Malaysia


1. MWA Initiated Move towards Water Reform

If it can be recollected, MWA initiated a move towards the reformation of the water and sewerage services industry at the turn of the century, which became a reality in 2007 when SPAN was created. At a workshop on “Water Regulation in Emerging Market” at Pan-pacific Hotel, Kuala Lumpur in November 2001 with support from the Economic Planning Unit of the Prime Minister’s Department, the UK High Commission and water practitioners, the MWA Committee was formed to prepare for the move.

A major concern at the time was the upsurge in demand for water services attributable to rapid economic growth since the mid-1980s. There was about eight-fold increase in demand between 1980 to 2010 (Review of National Water Resources Study, 2012). It was the intention of the Government to continue to grow the economy further. Water services industry, therefore, needed to be reformed in line with the planned economic growth of the economy. Water Services industry could not continue to be a social service without due regard to the economic viability of the water industry.

Various recommendations were made to the Government to initiate reforms in the water services industry but these never materialised. However, at the MWA Annual Dinner in April 2004, the Minister of the newly formed Ministry of Energy, Water and Communications, Dato’ Sri (later Tun) Lim Keng Yeik was in agreement with the appeal made by MWA and promised to implement the proposed reforms to the water services industry within three years – which he did by 2007 when SPAN was formed and the regulation of the water services industry was centralised.

2. Improvements in Water Services Industry

I have been fortunate to have been a SPAN Commissioner since its formation in 2007 and have seen much improvement in the

water services industry, as envisaged in the recommendation made to the Government.

An important aspect of the reforms is the enforcement of the Water Services Industry Act 2006 to regulate the water services industry which requires all water and sewerage services operators to be licenced by the Minister and to comply with licensing requirements including the submission of business plans and compliance with KPIs determined by SPAN. In regulating the water services industry, SPAN has a great role to play in finding a balance in meeting the demands of the consumers, provision of quality services, recognising the social obligations of the communities and generating a reasonable return to the shareholders of the corporatised water operators.

However, a number of the operators are presently economically unsustainable but this will, no doubt, improve with time. States that have migrated to an asset light model and accepted PAAB’s financing facilities, have shown signs of service improvements, especially in NRW due to availability of funds.

With more operators migrating to asset light model, where development of infrastructure assets are financed by PAAB, indications are that service levels have improved as the operators will be able to focus on improving operational efficiency without being burdened with financial constraints. A similar set-up for the financing of the sewerage infrastructure will also be beneficial.

i. Further improvements in water demand and resources management required to achieve developed country status

Except for Singapore, there is no reform initiative in ASEAN region similar to Malaysia. For a developing country, ours is quite comprehensive covering all aspects of water and wastewater services. It is, however, not enough to match with developed countries in this region. Developed countries, like Australia, New

byTan Sri Dato’ Ir. Syed Muhammad Shahabudin

Tan Sri Dato’ Ir. Syed Muhammad Shahabudin is the Chairman of SMHB Sdn Bhd and the Former MWA President (1995 – 2007). He is also the Commissioner of SPAN since 2008 and Fellow of Academy of Sciences Malaysia.

Malaysia’s Water Reform:The Challenges Continue…

17Water Malaysia

Zealand, South Korea and Japan have their own well established systems for governance, accountability, and sustainability, some of which could be adopted for use in Malaysia, especially in the prudent allocation and use of water and with regards to the 3R : reduce, reuse and recycle and reduction in the extensive use of potable water for non-potable purposes.

The perception that water is abundant in this country and should continuously be available should best be disregarded. As evidenced by the lengthy on-going drought (starting from the new year), coupled with high temperatures (global warming), the signs of water management stress are becoming significant and security risk could be impending if restructuring of overall water management is not initiated soon.

ii. Working towards Full Cost Recovery

It is the target of many countries to set the tariff for water and sewerage services at full recovery of all costs plus a margin. If this is applied in Malaysia, there is bound to be serious debates on this matter due to the challenges faced. The main constraint in full cost recovery is the ability and willingness of the consumers to pay. However, full cost recovery can be achieved gradually by reducing subsidies, making better allocation of resources, increasing cost and operations efficiency and transparency in dealings of operators.

To be sustainable in the long run, tariff should be able to cover both operations and capital expenditure. The last pillar to the reforms will be to create a tariff setting mechanism that is robust, fair and transparent to ensure long term sustainability of the water services industry.

iii. Common billing system

Based on the current economic model of sewerage services, we have to accept that full cost recovery for sewerage services is unlikely to be possible in Malaysia unless the sewerage services charges are based on consumption of water. This however would result in substantial increase in the sewerage services charges. This move would be unpopular and unacceptable to the consumers as they won’t be able to accept paying high charges for services that they cannot see.

Thus there is a great need to educate the public to increase awareness and acceptance of the new charges. The integration of water supply and sewerage services is also imperative as other than creating a value chain of providing holistic water services will allow a green tariff to be imposed.

iv. Sustainable development and water governance

Unsustainable development has generated immense pressures on water resources, affecting its quality and availability to the

extent that what seems to be abundance of water in the country is reduced scarcity of water (freshwater) during a long period of drought. The ever growing demands (and misuse of water resources) have increased the risks of pollution and severe water stress in many parts of the country.

“The fact is there is enough water available to meet the world’s growing needs, but not without dramatically changing the way water is used, managed and shared. The world water crisis is one of governance, much more than of resource availability, and this is where the bulk of the action is required in order to achieve a water secure world”. (UN World Water Assessment Programme, 2015 Prologue on the future of water – A vision of 2050).

v. Holistic restructuring of the Water Sector

When Malaysia becomes a developed and high income nation in 2020, an ideal situation is for the country to fully attain sustainable water management comprising Water Demand and Water Resources (supply) management. In short, sustainably maintaining actual demand and then allocating enough for the supply.

On the demand side, only water supply and sewerage services sector (regulated by SPAN) has plans in place which support Water Demand Management (WDM). At the national level, the agricultural and the ecosystem (environment) sectors have yet to establish institutional and level framework for sustainable water management.

On the Supply Management side, there is much to be accomplished at national level although a number of states has established institutional and legal framework for sustainable water management, notably Selangor Water Management Board LUAS). Water and land are state matters. Possibly, initiatives on improvements on the Supply Management side should be left to the states concerned. However, Federal-State collaboration may be needed on such issues as legal protection of water catchments, environment degradation and water stress situations in the interest of the nation.

There is also need to harmonise the way water is managed and implemented in a concerted manner. It must be accepted that water is a valuable asset and is tradable and some amount of public-private sector participation may be necessary. Economists and Engineers should have an interest in arrangements for allocating scarce natural resources, like water. Comparison with Federal-State structure in Australia will be benefitial.

It is, therefore, important to set a vision to holistically restructure the Water Sector to achieve sustainable management of water in the near future, possibly by 2030.


18 Water Malaysia

1. Achievements under the water restructuring in Malaysia

• First of all, the migration of the first state (Melaka) only happened in December 2008, about 7½ years ago. Two other states, namely Negeri Sembilan and Johor, followed suit within the subsequent 3 months. The other states namely Perlis, Penang, Perak and Selangor (partial) joined PAAB’s scheme much later, with Selangor being the latest.

• Out of the 7 states above, only Johor and Selangor migration involves major fund raising exercise from the market. The rest are merely effected by way of novating the existing Federal Government loans.

• Therefore in the actual sense, only the performance of the first 3 states (Melaka, Negeri Sembilan and Johor can be analysed to a certain degree of relevance. For the other states, not only they came in much later but thus far there are no major projects completed in those states.

• Although generally water infrastructure projects are long term in nature, certain components such as pipe replacements and rehabilitation may show significant results in the short to medium term.

• Based on MWIG 2015 data, NRW reduction in the 3 states from 2008 to 2013 are as follows:-

> SAINS 50.5% to 36.3% > SAMB 30.1% to 22.1% > SAJH 31.3% to 26.4%

• We believe that the above improvement in NRW was achieved through a combination of factors, namely;

ease and availability of funding from PAAB, better focus on operational efficiency through implementation of service KPIs by SPAN and successful collaboration in implementing projects between PAAB and Water Operators.

• In terms of financial performance, it is much harder to make a distinction between pre and post-migration periods because, on the back of increasing electricity and other costs, certain major parameters such as the optimum tariff required to operate a successful operating companies are not being met due to external factors beyond the controls of Water Operators and PAAB.

• As such, it is not a straight forward conclusion whether the financial performance of these operators have improved or deteriorated post-restructuring although in terms of absolute revenue, the numbers have been increasing steadily due to higher capacity built and higher demand.

2. The funding model under the asset light model

Funding model under asset light regime is based on the approved business plan submitted to SPAN. The execution of the projects are reviewed by PAAB via its Project Evaluation Committee. Generally, viable projects which are able to enhance the revenue of the operators as well as those required to mitigate possible water issues will be prioritised.

• Again, the key success factor is the credibility of the business plan by the water operators. If the business plan is done properly and all major assumptions are valid, the implementation of capex funding and works should be smooth sailing.

Dato’ Ahmad Faizal Abdul Rahman is the Chief Executive Officer of PAAB (National Water Asset Holding Company) since 1 July 2009. He also sits on the Board of Directors of PAAB and several other companies under the Group. Prior to PAAB, Dato’ has had over 16 years of experience in the areas of banking and corporate finance.

by Chief Executive Officer Dato’ Ahmad Faizal Abdul Rahman

PAAB – A Key Playerin Water Reform


19Water Malaysia

• Nevertheless, despite the challenges, we had been able to implement most of Operational Period - OP1 and OP2 projects, as approved by SPAN, barring several with peculiar issues such as those involving protracted land issues and local authorities.

• Going forward, whilst much improvement in terms of project coordination have been seen on the ground, new challenges such as the financial capacity of the operators to keep building new capacities are starting to surface. This is due to the commencement of lease rental for the projects completed in the past 6 years which is taking its toll on the operators’ cashflow.

• We feel that whilst both PAAB and the operators are doing their best to keep the momentum going, the Federal and State Governments should also review the existing policies to lighten the burden on the operators so that PAAB can continue its funding for new projects.

• Among the suggestions which have been highlighted and raised by water operators in various forum are: > To convert all Federal Loans given prior to migration and those for water sources into grants. This means every operator will start with a “clean slate” upon migration without having to shoulder the heavy burden of legacy loans. > The State Government to only charge minimal or nominal tariff for raw water until such time that the operators can be considered operationally viable and financially stable. > The State Government to review or restructure water tariff in line with water tariff setting mechanism promoted by SPAN. > The Federal Government and relevant agencies to consider nominal electricity tariff for water treatment plants (as water is considered the most basic neccessity) and/or assist in reducing their electricity costs through green technology funding/grants.

3. Challenges posed by full cost recovery

• Based on the earlier estimated the full cost recovery is expected to be in the region of 45 years with assumption that tarif f review to be done every 3 years together with the review of new operating periods. However, this has not been the case due to its politically sensitive subject. Recent revision of tarif fs was done after more than 10 years of no review. In some states even longer than 15 years.

• Affordable lease rental charged by PAAB (given the tariff assumed) is another factor which might extend the full cost recovery period due to ever increasing cost of borrowing in the market as PAAB is fully funded by the market as opposed to government soft loan.

• In this regard PAAB may have to either increase the lease rate in the future or extend the lease period in order to cover its borrowing costs.

4. Fast tracking the restructuring exercise

• Well-functioning capital market in Malaysia has enable PAAB to tap funds for restructuring efforts with lit tle dif ficulty. The government guarantee accorded to our sukuk attracted wider investor base in our fund raising exercise and subscribed our sukuk at some reasonable premium.

• In order to fast track, the restructuring model need some modifications. It must recognise that different states are at different stage of operations and has unique issues to deal with.

• The model must be purely for restructuring and not tied up to the repayment of existing federal loan. The experience from earlier WOs in respect of this issue raised concern to the non-migrated states and impede the progress as the WOs is being burdened with legacy loans repayment in the form of lease rental on old assets.

• Total or even partial write off of the state’s old federal loans would be a pushing factor for the states to migrate. Alternatively, the payment of the federal loans to be address later after the WOs achieved full cost recovery. In this regard federal loans subordinated to lease rental payments to PAAB for the new assets. This practice is common is most infrastructure financing so as not to burden the restructured entities. Otherwise the progress of the restructuring will be dragged by the payment of old assets.


20 Water Malaysia


1. On Streamlining the Regulatory Aspects of Sewerage Services…

Throughout the reform, much focus has been given to streamlining the regulatory aspects on water supply sector. New Regulations towards getting uniformity of procedures and standards were embarked and later lead to financial mechanisms on tariff setting. I can fully understand that sewerage services have been regulated since the formation of the Sewerage Services Department and various forms of harmonisation and standardisation of procedures have been implemented.

But the lack of economic regulatory component for the sewerage sector has now become critical as the breakdown of costs in providing services could not be benchmarked due to monopolistic nature of business. Thus it necessary to build up the pertinent cost component on a state-by-state basis for sewerage services to be at par with that for water supply. This will be helpful towards planning for the integration of services which forms part of the national policy objectives under Act 655.

As for the regulatory enhancement aspect, SPAN will be spearheading the use of ‘smart monitoring’ concepts where data on vital operating parameters of licence holders will be capture on-line with less reliance on in-puts by the operators themselves. This will provide us with real-time conditions at strategic facilities and be better informed.

2. On Target to Complete whole of Water Restructuring Plan…

Many of the water operators in Peninsular are already licensed by SPAN except some that have not migrated to the asset-light model where the assets are transferred PAAB to settle the Federal loans on water facilities. After the asset transfer, they are able to take up PAAB financial arrangement for future CAPEX and paying back through the lease rental mechanism established under the reform.

The operators that have not migrated to the financial arrangement under PAAB are currently obtaining financial assistance from their respective State Governments. This could not be sustainable in the long run since investment on water projects are huge and State Governments will never be able to recoup the investments as evidence through the amount of debt that were accumulated by all State Governments before the restructuring exercise began.

With the Federal Government not providing anymore loans on future CAPEX for water supply, I could foresee that within the next 2 more rolling plan of the 11th Malaysia Plan the water restructuring exercise will be completed.

3. On Amendments to Existing Laws…

Both Act 654 and Act 655 have been proposed for review since 2012. The proposed amendments are with the Ministry. SPAN is hopeful the amendments will carry through by 2017.

4. On Significant Changes to Governance Matters…

Significant changes in governance lie in a more discipline approach towards achieving targets and KPIs base on a 3 year Business Plan that was prepared by the opertors and approved by SPAN. Monitoring of performance base upon a Plan makes everyone aware of the impact of non-compliance to agreed targets and thus efforts to remain on track of the Plan makes all operator extra vigilant.

However increase of public confidence towards the industry requires more effort. The level of information relating to the costs as well as efficiency measurement in operating and managing the water services could be shared with the stakeholders of the industry including the consumers. This will make many aware of the true value of water and become more appreciative of a fully regulated water industry that covers all stakeholders.

Dato’ Mohd Ridhuan Bin Ismail was appointed as the Chief Executive Officer of Suruhanjaya Perkhidmatan Air Negara beginning 1 March 2015. He joined SPAN in 2008 as Executive Director after an illustrious career at Sewerage Services Department as the Director General from 2006 to 2007.

by Dato’ Mohd Ridhuan Ismail

Water Reform –Outlook and Directions

21Water Malaysia


5. On Resolving Current Water Issues through Reform….

The reform provides the concept and principles in turning around the water industry towards long term sustainability. In going through the changes, issues of water shortage and

leakages will definitely continue to occur but systematic approach in dealing with such challenges towards minimising these incidents as well as having a mechanism to evaluate continuous improvement in tackling the issues is part and parcel of the reform itself.

• All water operators and water asset owner are regulated by SPAN through the new licensing framework

Under the WSIA licensing framework, a Facilities License is required for the ownership of water infrastructures whilst the operator of these infrastructures would be required to apply to SPAN for a Service License. This new approach will ensure that water operators continue to provide quality water and services to the consumers. Failing which, their licenses may not be renewed.

• Separation of responsibility between water operators and water asset owner

The separation of ownership from the operation of water infrastructure is aimed at driving the industry towards financial sustainability as well as better efficiency.

With the burden of financing and developing new water infrastructures transferred to PAAB, water operators are free to focus their full efforts on achieving operational efficiencies.

• Corporatisation of State Water Supply Authorities to improve efficiency

State Water Supply Authorities, the Government agencies which currently operates the water services in most states, will be corporatised to enable them to operate as efficient corporate entities. It is also to ensure that revenues generated from water services operation are reinvested in the water supply sector.

• Performance of water operators to be monitored through Key Performance Indicators ( KPIs)

The performance of water services operators will be monitored through Key Performance Indicators and other standards that are imposed by SPAN. Those who fail to meet the required standards may have their Service license revoked. These licenses are renewable on a 3-year basis.

• Setting of tariff based on uniform principles and procedures

The setting of water services tariff is based on uniform principles and procedures and is subject to approval by SPAN. Currently, the State water operators decide on their respective tariff levels based on varying considerations.

• No new water services concessions

No more water services concessions will be awarded in the future. Existing concessionaires that choose to remain with their concession agreements are allowed to operate until the end of their concessions but will be subjected to the provisions in WSIA.

• Cessation of provision of Federal Government soft loans to State Governments for water infrastructure development

Federal Government will no longer provide loans to State Governments except to Sabah and Sarawak , for the development of water services infrastructure. The responsibility to finance and develop new water infrastructure will be transferred to PAAB. As a Government-owned company, PAAB is eligible for more favourable financing rates which will translate to better tariff rates for the consumers.

The water infrastructures will be leased to the water operators for operation and maintenance.

• The establishment of Water Forum

The establishment of the Water Forum is to, amongst others, ensure that the consumers’ interests are protected. One of the functions of the Water Forum is to provide feedbacks and recommendations to SPAN on any matters concerning the interest of consumers of water supply and sewerage services.

In A Nutshell – Water Reform in Malaysia

22 Water Malaysia


Some gains and benefits the wastewater services sector had received as a result of the water reform process

While the gains and benefits in the last 12 years were mostly accrued to the water industry in particular, there were also some highlights and milestones notably in the sewerage industry.

In the wake of the water reforms, there were also concerted moves by the sewerage industry toward enhancing operational efficiency and customer services, particularly employing key performance indicators (KPIs) to harness the potential of the Company and competencies. In IWK’s case, there is also the added focus on system-driven quality management through the various International Organisation for Standardisation ( ISO) certifications and implementation in the areas of operations and maintenance, energy and environment management systems, among others.

The Greater Kuala Lumpur (GKL) project initiated via the water reforms is a major gain. The gist of GKL is

to close the multitude of individual septic tanks around the central business districts and instead redirect and connect the sewage flow to sewage treatment plants (STPs). The project also reduces the number of STPs and instituting better standards. In addition, there is the demand for good river water quality and, as a result, more allocations have been given by the Government in phases to implementations. To-date, 72 STPs has been rationalised under the GKL projects.

The water reforms and asset-light model of the water operators and their experiences would be a role model and lessons learned on exploratory discussions regarding Facilities Licensee (FL) among the key sewerage industry players.

Water tariff adjustment by some water operators paved the way for inevitable sewerage tariff revision, which has not been adjusted for the last 19 years.

As such, the push for FL and tariff review should be relentless in order to bring about a positive change in the industry.

Datuk Ir. Abdul Kadir Mohd Din took up the position of CEO at Malaysia’s largest wastewater services provider Indah Water Konsortium (IWK) on 1 December 2009. He formerly held the post of Chief Operating Officer at water asset owner PAAB. The moveto IWK had ensured a continuity of approach, as Datuk Kadir tackles perhaps the greatest challenge facing the Malaysian water industry – wastewater sector reform. He is also the Deputy President of MWA.

What’s Happening in Wastewater Reform

23Water Malaysia


In addition, IWK was appointed as SPAN’s Certifying Agency (CA), which enabled and facilitated a faster process of handing over of public sewerage systems constructed by developers as required by WSIA, reducing red tapes and unnecessary delays faced previously.

Inclusive in the water reforms is also the intention to work towards a merger of water and sewerage services, which when it comes to fruition will further enhance the sustainability and

How have we progressed towards sustainable tariff for the sewerages services

After many rounds of tariff review with the regulator, SPAN, the proposal was approved in late 2014 but the decision was put on hold in view of over-riding priorities, including the implementation of GST on 1/4/2015. The tariff review is crucial to IWK because the present model is unsustainable.

However, the will-power to change must be there and the tenacity to succeed should be the byword despite adverse political, economic or social scenario.

A shift towards volumetric regime would however address financial concerns in the longer term interest of the company and provides a sustainable environment for IWK to progress. The model of ‘User Pay Principle’ for the amount of water consumed would actually encourage water conservation and be less stressful on the environment.

Notwithstanding the above, the Cabinet has directed the Ministry of Energy, Green Technology and Water (KeTTHA) to initiate joint billing implementations with the State water companies to ensure better collection ability and also institute the provisions in WSIA for disconnecting water supply for non-payment of sewerage bills. Indeed, in industrialized countries, the practice of joint billing or variation of it, is the norm and best practices can be found in Australia, for example.

At present, the awareness level to common billing or some forms converging to that model is low and more efforts will be focused in that direction in the near future.

Can common billing resolve a major issue of sewerage collection faced by IWK?

A joint billing system with water operators would mitigate the incidences of accounts turning delinquent because water supply connection can be cut if arrears are not settled. This partnership with water operators would help IWK to improve sewerage collection albeit incurring nominal cost in doing so. Currently, IWK’s collection rate is 87% and this figure could potentially increase with joint billing with water operators. The first joint billing is with JBA Labuan and its results and

feedback will be studied further to gather more information on the impact of joint billing.

However, even if collection today is 100%, IWK still would not be able to cover its operating costs because of the current low sewerage tariff. The longer term objective is volumetric tariff system as it would address resource conservation and financial concerns, among others. Hence, it is inevitable that the current sewerage tariff needs to be reviewed to match the income against the costs of providing sewerage services.

Some changes to support the reform

SPAN has initiated the Regulatory Water Accounting to ensure a standard and holistic approach whereby water and wastewater operators are to report the costs of services accurately, with the intention of forming the basis and preparing the industry for future tariff reviews.

As in any industry, risk management is essential to the deliberation of business decisions and, for IWK, it is no different as it needs to address risks in key areas like operations and maintenance, finance, project, asset management and also reputational risks.

For all players within the water and sewerage industry to gain a better foothold of the operating and financial statistics, the annual publication of Malaysia Water Industry Guide (MWIG) was initiated for information sharing and transparency.

In terms of driving public consciousness and accountability among the players in the industry, major NGOs such as Malaysian Water Association (MWA), Association of Water and Energy Research Malaysia (AWER), Malaysia Water Partnership (MyWP), Water Association of Selangor, Kuala Lumpur and Putrajaya (SWAn) plus various Chambers of Commerce and consumer associations, which are 3rd party bodies act as check and balance and a voice of reason so that the industry can improve upon their feedback and operate more efficiently.

Public awareness is growing with the promotion of IWK and its services via the media and the involvement of the Company in radio talk and outreach programs at the local level.

However, the spirit of WSIA to be holistic, transparent and sustainable still has not fully materialized as the sector still remains fragmented with too many players. The characteristic within the industry hinders and obscures the true water industry potentials whereby the current worth is only valued at RM5 billion in comparison to the energy sector, which is worth close to RM50 billion and the telecommunication

24 Water Malaysia


industry, breaching the RM100 billion mark. Hence, there are still lots more to be done in the water industry.

In terms of corporate governance and accountability at company level, IWK adheres to Ministry of Finance’s procurement procedures. IWK is audited internal and external, including Jabatan Audit Negara. A proper Financial Authority Limit guides IWK’s fiduciary functions, levels of authority and ensure proper accountability within each level.

A Corporate Integrity Unit is also in place and together with Risk Management and Compliance Unit ensure that checks and balances are in place and Management stays in control.

Other thoughts on the sewerage services reform

The sewerage industry is moving into another gear with the sewerage services reform. Some of the key developments are as follow:

• Standard STP for the industry that help to expedite approvals and better efficiency in operational costs;• Standardisation of equipment and parts in IWK;• FL/SL dynamics where the FL will build the STPs while the developers will connect premises to the STPs and SL will focus on operations and maintenance; • STPs as a greener environmental friendly model instead

of being just a utility-based model, where the use of by- products like bio-solids, bio-ef fluent and bio-gas is promoted as a solution towards a greener application and input to industries, the environment and the community at large; • Move towards sustainability through zero waste management concept to convert waste to resource and waste to wealth;• Transforming the industry and restructuring of STP to be 1 Green Resource Centre (1GRC) and hence projecting a total new outlook for public acceptance; and• Merger with water operators with the goal of forming a water and wastewater hub for the developing countries.

For the above to happen, the Government needs to be serious in supporting generation of wealth from waste. A social policy to be established as foundation to support the enactment of an Act and regulation followed by effective enforcement to fully utilize the by-products of bio-solids, bio-effluent and biogas from the sewerage industry.

Finally, Malaysia’s water industry restructuring and management model that includes both water supply and sewerage could be a ‘good export model’ for many emerging and developing countries to follow. Malaysia can be a practical role model for these markets. The local industry could export their expertise in various areas of production, manufacturing, consultancy, contracting, training, etc. and expand Malaysia’s water model abroad.

El Nino 1998 – Back to the future?Courtesy from The Sun, 1998

Back to the future: “To know the future, just look to the past. You can know the end from the beginning. There’s nothing new under the sun.”

25Water Malaysia

The TRENCHLESS ASIA 2016, the ninth event in this outstanding series which for the first time will be held in Kuala Lumpur from 9 to 10 May 2016 at the Kuala Lumpur Convention Centre. MWA is a supporting organisation for this event.

The Conference will be presented by The International Society for Trenchless Technology (ISTT). The programme is designed to assist the international community with an educational and interactive forum that presents comprehensive and up to the minute information on the very latest in trenchless techniques. Presentation will be included from local and international

experts who will lead in-depth discussions on many aspects oftrenchless installation and repairs. Topics covered will include HDD, CIPP, Microtunnelling, Pipe Bursting, and much more. A parallel Workshop on Applied Trenchless Technologies will be held on 9 to 10 May 2016.

The above events are free-of-charge but must register with the organiser. Places are limited and based on first-come-first-serve basis. Download the Registration Form at www.mwa.org.my and return to MWA Secretariat or contact [email protected] (Johari Khamis). Tel: 03 6201 2250/9521, Fax: 03 6201 5801.

Take this opportunity to gain knowledge on latest trenchless technology updates that to be shared by the experts in the said fields.

MWA is celebrating its birthday and establishment in the water industry at the 28th Annual Dinner & Awards Night 2016 as follows:

Date : 2 June 2016 (Thursday) Time : 7:30 pm to 10:30 pm Venue : Hilton Kuala Lumpur

The Honourable Minister of Energy, Green Technology & Water (KeTTHA) is invited as the Guest of Honour.

The highlight of the evening is the presentation of MWA Water Awards:

1. Malaysia Water Award2. Best Treatment Plant Award for Water & Sewerage Industry 3. MWA Green Talent Award

The event will be a “Black Tie” dinner in line with the prestigious occasion.

Table/seat prices range as below:

RM10,000 per table (Platinum Sponsor) RM6,000 per table (Gold Sponsor) RM4,000 per table (Silver Sponsor) RM400 per seat

The companies’ logo for the Platinum Sponsors will be displayed at the backdrop and published in the souvenir programme book. The certificates of appreciation will be presented to all sponsors. Reserve your prominent tables now at www.mwa.org.my / Johari Khamis ([email protected]), tel: 03 6201 2250/9521.

28th Annual Dinner & Awards Night 2016

MWA - Upcoming Events

• DATE : 30 April 2016

• VENUE : Kota Permai Golf

and Country Club

• TIME : 9:00 am to 1:00 pm

Notice of AGM was sent to all members Members

are welcomed. Please ensure your membership

status are current.

MWA 28th

Annual General Meeting 2016

30 April 2016The 11th Malaysia Plan:Policy Directions for the Water& Wastewater Sectorby Dr. Ching TooMinistry of Energy, Green Technology & Water

Post - AGM Talk

Trenchless Asia 2016

BEM APPROVEDCPD HOURS: 6

www.trenchlessasia.com

MWA 2-Day “Write Like a Professional” Course,7-9 September 2015 by Dr. Alistair King

26

Site Visit to a Pilot Integrated Domestic Sewage Treatment & Water Reuse Package Plant (IWK STP Bukit Tinggi, Klang) by Jinluo Water, 25 August 2015

M W A A c t i v i t i e s

MWA-ABB (M) Sdn Bhd Technical Seminar World Class Water Managementand Technologies for a Sustainable Future, 15 September 2015

27Water Malaysia


In-house Training Course on Water Treatment for PAAB,14-15 September 2015

28 Water Malaysia

Borneo Water & Wastewater Exhibition 2015, Kuching, Sarawak (BWWE 2015), 14-16 December 2015

held in conjunction with the 28th Annual Meeting of JTJAD


The 3rd edition of Borneo Water & Wastewater Exhibition and Conference was successfully held at the Borneo Convention Centre Kuching, Sarawak. The BWWE 2015 was inaugurally held in conjunction with the 28th Annual Meeting of National District Water Engineers Action Committee (JTJAD).

The theme of BWWE 2015 was Our Water Resources: Manage, Safeguard, Conserve.

Being the important biennial event in Borneo, the BWWE 2015 has received a full support and participation from the Sarawak State Government, Ministry of Public Utilities Sarawak, Kementerian Tenaga, Teknologi Hijau dan Air (KeTTHA) and other government and water agencies namely Kuching Water Board, Jabatan Bekalan Air Luar Bandar Sarawak, Sibu Water Board, Jabatan Bekalan Air, Laku Management Sdn Bhd, Suruhanjaya Perkhidmatan Air Negara and Sewerage Services Department Sarawak and JTJAD.

29Water Malaysia


The Guest of Honour, YB Datuk Amar Haji Awang Tengah, the Minister of Public Utilities Sarawak in his address at the Opening Ceremony of BWWE 2015 extended warm greetings to the delegates of BWWE 2015 especially the international delegates to Sarawak Bumi Kenyalang. The BWWE 2015 was declared open by the YB Minister and he subsequently toured the exhibition booths at the convention centre.

The 3-day Conference and Exhibition was attended by 395 delegates including exhibitors. A total of 29 papers were presented on various water and wastewater related subjects by some national and international key speakers. Foreign participating countries were Singapore, Philippines, Vietnam, China, Australia, Netherlands, Germany and United Kingdom besides Malaysia. The exhibition was visited by approximately 150 people, besides the Conference delegates.

In conjunction with BWWE 2015, a Welcoming Dinner was held at the Pullman Kuching with about 600 guests attended including conference delegates and their family members, who took advantage of the year-end school break to spend their holidays in Sarawak. A few side programmes for the family members were also arranged. The highlights of the evening was a presentation of the Sarawak Water Industry (Contractor) Award 2015 and the launching of MWA Sarawak Protem Committee. Once again, we were honoured to have the YB Minister of Public Utilities Sarawak to grace the evening and he was in a joyous mood to share a song with the dinner guests. It was indeed a wonderful and entertaining dinner featuring some cultural dances from the local entertainers complemented with great food.

The three days event was concluded with a two parallel workshops and site visits to Bengoh Resettlement Scheme, Batu Kitang Water Treatment Plant and Kuching Centralised Sewage Treatment Plant.

The organisers expressed thanks to all supporters and participants for the support, time and resources contributed for BWWE 2015 success. Last but not least our very special thanks to Sarawak Convention Bureau for being supportive, encouraging and helpful since the first edition of BWWE held in Kuching, Sarawak in 2010.

Technical Talk on Application of Geotube Dewatering Technology byTaliworks Langkawi & TenGate Geosynthethic Asia Sdn Bhd, 10 March 2016

30 Water Malaysia


Site Visit to Molecor Factory at Gebeng, Kuantan, 15 October 2015

Technical Talk on Application of Geotube Dewatering Technology byTaliworks Langkawi & TenGate Geosynthethic Asia Sdn Bhd, 10 March 2016

MWA-Veolia Workshop: Technologies on Sewage Treatment and Reuse,24 March 2016

31Water Malaysia


World Water Day 2016 in Johor by SAJTaman Tasek Merdeka, Johor Bahru, 2 April 2016

32 Water Malaysia

Non-Revenue Water Reduction Training Course for SEAWUN,4-5 April 2016, KLCC

MOU Signing betweenMWA and SEAWUN on Training,

6 April 2016, KLCC

MOU Signing between MWA andUBM on Asia Water 2018 - 2022,

7 April 2016, KLCC


MWA jointly organised with RWS the NRW Reduction Training Course for SEAWUN. About 18 trainees from water utilities in Vietnam participated.

On 19-21 January 2016, a training course “Pensijilan Kemahiran Manusia” by Jabatan Pembangunan Kemahiran, Kementerian Sumber Manusia was conducted at MWA premise. A total of 37 persons were presented with the certificate as Water Industry Expert that qualify them as trainers for the Pengiktirafan Pencapaian Terdahulu (PPT) 2015.

Datuk Harjeet Singh, the Chairman of the 7th IWA-ASPIRE 2017 National Steering Committee who is also the Deputy Secretary General of Ministry of Energy, Green Technology & Water (KeTTHA) was transferred to the Prime Ministers Department on 18 March 2016. MWA would like to express a big thank you to Datuk Harjeet for his guidance and contribution in the IWA-ASPIRE 2017 project. We wish him all the best in his new position.

Presentation of Certificates by the Minister of Public Utilities Sarawak to the MWA Sarawak Protemp Committee at the Welcoming Dinner in conjunction with BWWE 2015.

From left holding the certificate: Mr. Lee Koon Yew, Ir. Lau Hieng Ung, Mr. Chebby Loren, Mdm. Roslelawati Mohamad Amin, Dato Ir. Alice Jawan, Tn. Hj. Ubaidillah Hj. Abdul Latip, Mr. Mohamad Sabari Shakeran (wearing blue batik next to the Minister), Ir. Daniel Wong and Mr. Wong Tiong Kai.

Water Engineering Technology Sdn Bhd was awarded the Sarawak Water Industry (Contractor) Award 2015 in conjunction with the BWWE 2015. The award was presented by the Minister of Public Utilities Sarawak, YB Datuk Amar Haji Awang Tengah at the Welcoming Dinner at Pullman Kuching.

33Water Malaysia

Kursus Induksi Persijilan Kemahiran Manusia-

Pengiktirafan Pencapaian Terdahulu (PPT) 2015

The Launching of MWA Sarawak Protem Committe 2015/2017 Session

Sarawak Water Industry (Contractor) Award 2015


Datuk Harjeet (sixth from right) with some of theMalaysian delegation at the 6th IWA-ASPIRE Beijing 2015

34 Water Malaysia

F e a t u r e d A r t i c l e s

1. INTRODUCTION

The Kahang Dam project (the Project) is located in the Kluang District, Johor. The potential of Kahang Dam as a water supply resource area has been identified in two sets of studies:

• The Feasibility Study for Kluang Water Supply Johor dated 1984 (FSKWS 1984); and • The National Water Resource Study 2000 (NWRS 2000)

The latest water crisis that has led to the urgency to implement the dam project has occurred within the period between mid 2009 to mid 2010. The STAR news dated 17th February 2010, reported that the water crisis was caused by the prolonged drought that have started since May 2009. In order to avoid the recurrence of the crisis, all parties concerned have made it the objective to get the Project to materialize soonest possible. Taking into account all the required process components and its related flows, KeTTHA/ JBA has realistically settle on the construction of the project to commence by midyear 2013.

In order to achieve the objective, KeTTHA/ JBA has justifiably hypothesized that, there would be of limited other choices to embark on the Project except to carry out the implementation by “Fast Track” approach.

There are essentially a few alternatives in order to take the project through “Fast Track” approach such as the joint venture, design and build and the built-operate-transfer methods. The Kahang Dam project implementation is adopting the “Contracts with Government Agencies” method [3]. This type of approach requires JBA to produce a project’s tender document, of which later to be offered to qualified bidders for the physical execution of the project. In view of this approach, JBA would require the service of a civil & structure consultant to undertake the task.

Four-in-One Concept in Project Implementation for the Construction of

Four-in-One Concept in Project Implementation for the Construction of

ByDato’ Ir. Dr. Hasnul bin Mohamad Salleh(Former DG of Water Supply Department)

Ir. Lim Soon Guan and Ir. Hasnizal Hashim(HLA Associates Sdn. Bhd)

Kahang Dam

35Water Malaysia


2. STRATEGY TO IMPLEMENT 4 in 1 CONCEPT

In today’s demanding society we must be able to react to the changing market needs rapidly, effectively, and responsively. We must be able to reduce the time to adapt to the changing environments. Decisions must be made quickly and must be done right at the first time. We can no longer afford to go through unnecessary procurement procedures and to prolong the time to deliver project. Therefore, completing a project faster than the normal duration is always a challenge to the management of any project, as it often requires changes in the ways that we are used to doing things.

Projects are required to be completed in shorter duration compared to normal schedules so that faster return on investment and higher return with longer project life could be obtained. Should the project implementation is subject to unnecessary procurement procedures, applying obsolete conventional tools and techniques of project management it is impossible to solve the problem of reducing the project duration from a normal period.

4 in 1 approach can be applied to the project implementation as one of the procurement procedure for the client and project implementer to complete a project successfully with a shorter duration especially major contracts which usually have a

lengthy procurement process requiring various approvals from the Government Agencies. The 4 in 1 approach radically will reduce project duration. The seamless inter phasing of the project are accomplished simultaneously instead of in series. The requirement for series of procurement procedure will not make it much quicker.

The complexities from project management can be tackled through management of approval process, management of subcontractors and improving management commitment, strengthening project-planning activities, ensuring project quality, managing project risk objectively and integrating project activities through information management systems and establishment of project interaction diagrams. These would help to improve project effectiveness in terms of quality and cost.

To ensure a successful implementation of 4 in 1 concept, the project implementer must have full support from various stakeholders during project implementation, a strong leadership and commitment from the project implementer and consultants, the availability and competency of the Project Management core team and the current procurement procedure which does not encourage this concept shall also be reviewed.

The 4 stages of implementation to be attended against the complete project life cycle are as markedly bolded and shaded as in Figure 1.

Figure 1 : The Project Life Cycle of a Constructed Facility [1]

Market Demand or Perceived NeedsDefinition of Project Objectives and Shapes

Definition of Project Objectives and Scopes

Assessment of Benefit/Cost or Qualityto be Delivered/ Expectation

Construction Plans and Specification

Completion of Construction

Acceptance of Facility

Fulfillment of Useful Life

Conceptual Planning and Feasibility Study

Value Management

Design and Engineering

Procurement and Construction

Startup for Occupancy

Operation and Maintenance

Disposal of Facility

36 Water Malaysia


3. THE PROJECT - “FAST TRACK” METHODOLOGY

The “Fast Track” is defined as the quickest and most direct route to achievement of an objective. The process of developing and achieve an objective requires certain orderly sequence of relevant process flows to be intertwined in a coordinated manner. Each of the process flow is understandably will demand time to complete the process. In project implementation context, almost all process flows are imposed with certain governance procedure directed to serve the interest of the stakeholders. Coupled with the requirements to adhere to these imposed procedures, the time taken to achieve an objective will be stretched further. It would be of the interest of “Fast Track” project implementation to find ways to shorten the duration whenever possible. Therefore it would be synonymous in “Fast Track” project implementation to analyze the complete chain of process flows in the following sense, amongst others: • To identify the potential options for mandatory process components and its expected level of achievement of the final target. • To identify the process component that could have the potential to be omitted • To identify the repetitive process components that could have the potential to be combined • To identify the areas where requirement for governance procedure could be relaxed or even to the extent of relinquishing the process from its requirements. • To identify area where processes could be performed in overlapping manner • To identify areas where human resource handling and utilization could have the potential bearing to shorten the duration.

Aligned with the goal to launch the project undertaking through a “Fast Track” approach, all implementation areas that could have the potential to be manipulated, amid tolerable governing regulations, will be scrutinized and executed with the prime objective of expediting the whole processes, gearing the Project toward targeted materialization.

4. PROJECT IMPLEMENTATION BY “FAST TRACK” APPROACH

One area that have been identified by KeTTHA/ JBA in Kahang Dam “Fast Track” approach, is by combining the undertaking of all the four (4) elementary components that is the feasibility study, value management, engineering design & tender and construction of the project to be carried out under one (1) appointed principal consultant specialized in the field of civil and structural engineering. This is justifiably reasonable as this step would gain the time that would otherwise has to be spend to carry out the engagement, selection and

appointment exercises for the separate parties respective to the four different stage of works. The undertaking of this approach is meant to carry the project through the “Fast Track” implementation of which certainly will have the impact to shorten the duration in tackling this part of the process and subsequently will enable the other sequential processes to be implemented at an earlier time.

Aligned with the intended approach, KeTTHA/ JBA has produced a set of Terms of Reference (TOR) directed for the appointment of a principal consultant that serves to spell out the services to be delivered to cover all the four elementary aspects. Subsequently, the project’s requirement for other engagement, in other areas such as the specialist works by qualified parties recognized by regulatory agencies or the tendering process to carry out investigation works and the main works will be tasked under the Principal Consultant. Although the task is under the administer of Principal Consultant, all the maneuverings to administer the engagement processes of the parties that are intended to execute parts of the works are to be in accordance with the procedure as outlined in the Manual Perolehan Perkhidmatan Perunding (MPP).

5. SCOPES OF PROJECT TO TERMS OF REFERENCE (TOR)

The scopes of the Project, as outlined in the TOR, exerted the expectancy of the Government from the civil and structural consultancy services according to the four elementary components that could be summarized as below:

a. Feasibility study • Water demand study and reaffirm the demand value against the value established in National Water Resource Study 2000 (NWRS 2000) • Survey data and terrain study • Hydrological study • Water quality and treatment requirements • Potential yield study • Sedimentation study • Dam operating and rule curve study • Geological and geotechnical study • Environmental screening and establishment of framework environmental impact assessment • Potential conceptual design arrangement

b. Value Management • Value management study

c. Engineering Design & Tender Documentation • Environmental Impact Assessment • Survey works and land acquisition • Geology and geotechnical investigation

37Water Malaysia


• Design criteria • Detailed engineering design • Geological and geotechnical design • Dam ancillaries works • Intake and raw water pumping station • Raw water pipeline • Reservoir management plan • Tendering, tender evaluation and award

d. Project Implementation • Construction supervision • Administration of contract during and after the construction

Looking at the scopes covered under the respective four stages of implementation, in the context of the “Fast Track” implementation, it would be a sensible maneuvering to have a common entity which is tasked with performing the core area of work, that extent to cover all the stages, to be involved throughout the implementation cycle. It could be deduced that the core area of work for this project is the civil and structural engineering parts, thus under this understanding, the most appropriate party that could be tasked to oversee all the 4 implementation cycles would be the C&S consultant, appropriately identified as the Principal Consultant.

6. PROJECT IMPLEMENTATION: FOUR (4) IN ONE (1) APPROACH

The engagement for the project’s engineering consultancy services has been carried out through an open tender exercise. Invitations were made public, through printed media, for all consultants that would have the interest to offer their expertise in the engineering consultancy services. The submission was required to be made in two (2) parts comprising the technical and financial aspect of the bid proposal. All submissions weresubjected to a series of evaluation processes by the tender board and Jawatankuasa Penilaian Perunding (JPP). The assessment processes were directed: • to ensure the transparency of the selection and award of the Project. • to ensure that the most technically and financially qualified Consultant will be awarded to undertake the scope of the project in line with the requirement as outlined in the TOR. Once appointed, the Consultant will have to carry out all the four (4) implementation stages as outlined in the TOR.

a. Stage 1 - Feasibility study

In the context of the feasibility study, there are two (2) earlier studies where theKahang Dam project is mentioned to certain extent of details, which is the Feasibility Study for Kluang

Water Supply Johor 1984 and the National Water Resource Study 2000. The part of content where the Kahang Dam project were involved and engaged, bring indication that a study process, to certain extent, has been carried out in the past. The previous data, as contained in those earlier studies could be construed as pre-feasibility study, a form of prelude to the present feasibility study. Thus, the appointed Consultantrequirement in this part of scope is to reaffirm earlier findings as established in those studies by carrying out a more extensive investigation and by obtaining additional and the most up to date field data. By the end of the feasibility study stage, the project design scheme could be of similar concept against the earlier study or it could be a different concept scheme that do not have any similarity or continuity against the data established earlier. However, the data from earlier studies could serve to expedite the present works as it could also be used as guides and reference materials against the present study exercise. Through the approach of executing the project adopting the 4 in 1 implementation concept, the Principal Consultant would definitely be in the position to better understand the project and some of the data collected during the study could be readily utilized for other sequential stages of implementation. The approach could have the potential to eliminate double process works such as repeated search of data and repeated process of study and interpreting the data. The 4 in 1 implementation could ensure that there is a continuity of data handling and comprehending the data, thus save time and cost that would otherwise has to be spent under the repeated element of works.

The undertaking of 4 process flows under one Principal Consultant could ensure the continuum of sense of awareness and appreciation of the project, thus could potentially maximize the return, gaining through the principal areas such as the value and the sustainability of the project as shown in Figure 2.

Figure 2 : Requirements for Sustainable Infrastructure [2]

38 Water Malaysia

b. Value Management The Kahang Dam project component of works, though have been outlined in detail in the TOR, would still open to options and alternatives that would deemed to have the potential to drive the project toward a better value against the cost to be invested. These potential options would be integrally evaluated in terms of the technical performance, the elements of time and schedule in the implementation process and the cost and resources to be associated with each approach, all the while taking into account the level of risk against the targeted objective as intended by the stakeholders. It is of common adopted approach in a particular project implementation, that the elements of cost and the time to be invested are driven toward the minimal direction while the technical performance is driven towards maximal direction as shown in Figure 3.

Figure 3 : Value Management Elements

The value management exercise to be undertaken by the Principal Consultant under the 4 in 1 implementation concept could ensure that there is a better understanding on the project basis, in view that it is the Principal Consultant himself that has carried out the feasibility study stage. The Principal Consultant will not have to repeat the process that have been put through under stage 1, thus in return will shorten the duration to carry out the value management exercise. It will enable the principal consultant to direct the project more effectively toward achieving its objective with justified conviction against the cost that is about to be spent on the project.

c. Engineering Design and Tender Documentation Upon the consensus agreement on the value of the project to be gained during the Stage 2 process between the Stakeholders (i.e. the Government, BAKAJ, SAJH, etc.) the Principal Consultant shall undertake to develop the project concept further into the next stage. The Stage 3 process would involve the undertaking of the detailed engineering process and subsequently upon acceptance of the detailed elements, the undertaking of the tender documentation

The 4 in 1 implementation would bring the advantage in the same significance assubjected to earlier stage of implementation, which is the potential avoidance of repeatedelement of works, thus gaining time and expediting the project implementation. Directly and indirectly, elimination of repeated works elements, would theoretically bring cost saving into the project implementation. Every aspects of the engineering design will take into consideration, with a full awareness on the value management elements, the level of technical performance, sustainability, time, cost and risk being targeted or intended to be achieved by the stakeholders.

The involvement of the Principal Consultant from the beginning will definitely carry more weight onto the level of awareness of the Principal Consultant in the course of executing the detailed design process, thus improve the performance in undertaking the works under this stage of works.

Some of the works done under Stage 1 Feasibility Study would form parts of the works under the Stage 3 Detailed Design, more so with minimal manipulation of the earlier works. The undertaking of the works under 1 Principal Consultant could ensure the convenient of approach in areas such the accurate representation of data and eliminate unnecessary time spend to collate, arrange and manage the data.

d. Project Construction Under the 4 in 1 implementation approach the project construction would be more effective as it is supervised and monitored by the Principal Consultant, whom should has the first hand knowledge of the project, of which gained through the involvement since Stage 1. The matters that concerned with drawings, bill of quantities and the specifications should be able to be dealt in a swift manner, since all the aspects are originated from the same Principal Consultant. The thorough understanding of the scopes of works would potentially bring about a better understanding of the contract, thus will contribute to better administration of the project. This will ease the handling of the contract and would guarantee that the stakeholders’ interests are delivered toward the utmost targeted values. Familiarities through the involvement since the beginning of the project implementation could also ensure that the construction outcomes are not deviated against the design and objective of the project.

7. CONCLUSIONS

The 4 in 1 implementation concept has brought bring benefits onto the Kahang Dam project in a number of foreseeable ways. Primarily, the benefits are due to the elimination of repetitive elements’ process thus will bring about the savings of time and cost during the implementation. This type of implementation approach could also has the potential to bring about a high


39Water Malaysia


degree of control over the project handling and administration, since there would be a process continuum asserted under one principal civil and structure consultant which extent to cover stage 1 until stage 4, essentially revolved around the project prime life cycle components covering the study and conception until physical materialization of the project.

8. SUGGESTIONS FOR FURTHER RESEARCH

The effectiveness asserted by the 4 in 1 concept implementation could be further confirmed by means of embarking on research or study on a group of actual project implementation. Comparisons of pros and cons should revolve around the values to be gained by the stakeholders in relation to different type of project implementation approach.The pros and cons could also be conditional depending on the nature of the project and the state of affairs of the project in relation to the time frame dedicated for implementation.

9. REFERENCES

[1] Chris Hendrickson, “Project Management and Construction” Fundamental Concept for Owners, Engineers, Architects and Builders

[2] Carl D. Martland, “Toward More Sustainable Infrastructure” Project Evaluation for Planners and Engineers.

[3] Sidney M. Levy, “Project Management in Construction”

N e w M e m b e r s h i p

New Membership Approved

40 Water Malaysia


1. Historical Perspective

Quote: “Planning for the Sungai Muda (Water) Scheme was initiated in early 1968,

and site works began in 1970 with loans from the Asian Development Bank and the Federal Government. With the launching

of Phase 1, this plant will supply about 136 million litres per day (MLD). With the

launching of Phase 2 and subsequent stages, Penang will have an excellent in-state water

supply scheme that is projected to meet development needs until Year 2000.”

By the late Tun Dr. Lim Chong Eu, Chief Minister of Penang, and Chairman of the Penang Water Authority Official Opening of the Sungai Muda Water Scheme,

9th November 1973.

The Sungai Muda Water Scheme was officially opened by the late Tun Abdul Razak bin Hussein, the second Prime Minister of Malaysia.

Phase 1 of the scheme comprised Penang’s abstraction of 136 MLD of raw water from Sungai Muda. The raw water was then pumped to the Sungai Dua Water Treatment Plant (SDWTP) through a 14km canal from Lahar Tiang.

Treated water from the plant was then transported through 27.2km of steel pipelines laid in Seberang Prai for

distribution to Butterworth and Prai, and through 3.66km of twin submarine pipelines to Penang Island.The official opening of the Sungai Muda Water Scheme and the commissioning of the Sungai Dua Water Treatment Plant heralded the beginning of Penang’s age of ‘high-tech industry’.

And, the words penned by Tun Dr. Lim, for the official opening of the Sungai Muda Water Scheme, have been proven to be both far-sighted and judicious.

2. Meeting Penang Water Supply Needs

In 1971, Penang’s population was estimated to be about 800,000 people and the Gross Domestic Product (GDP) per capita was RM1,025.00*. In 2015, the population estimate was 1.663 million people** while the GDP per capita was projected to be RM42,251.00***.

A 107.8% growth in population and 402.2% growth in per capita GDP over a period of just 45 years represent significant socio-economic progressions. Today, Penang is recognised as a high-tech international manufacturing centre, a South-East Asian hub for services (powered by information and communications technology), and Lonely Planet’s 4th ranked ‘Top 10 Cities to Visit in 2016’.

Continuous good water supply, 24/7, was, and still is, one of the fundamental elements driving Penang’s growth. There has been no incidence of water rationing in recent history, although water consumption has increased by 469.2%, from 52,120,428 cu.m. in 1973 to 296,662,323 cu.m. in 2015.

Since its corporatisation in 1999, Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) has been expanding and upgrading the Sungai Dua Water Treatment Plant (SDWTP) to meet all of Penang’s water supply needs.

by Dato’ Ir. Jaseni Maidinsa, Chief Executive Officer, PBA Holdings Bhd (PBAHB)and Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP)

Sungai Dua:Penang’s Most Highly

Evolved Water Treatment Plant

Sungai Dua:Penang’s Most Highly

Evolved Water Treatment Plant

The Sungai Dua Water Treatment Plant supplies more than 80% of the treated water that is distributed in the State of Penang daily. Its maximum treatment capacity has been upgraded nine-fold (900%), from 136 million litres per day (MLD) in 1973 to 1,228 MLD today.

41Water Malaysia


Today, more than 80% of Penang’s treated water is produced at this plant daily. In other words, the SDWTP is the most ‘highly evolved’ water supply installation in Penang’s history.

* PDC 20th Anniversary Book (Sept 1990)** Department of Statistics (2015)*** Speech by Penang Chief Minister YAB Lim Guan Eng at Merton College, Oxford University, UK (Oct 2015)

3. Summary of Plant Expansion/Upgrades

Table 1 summarises the evolution of the SDWTP:

The SDWTP is located on an 18.2-hectare site in Seberang Prai Utara. Raw water from Sungai Muda is delivered to the plant via a 14km canal. Conventional water treatment technology is employed for water treatment, incorporating the processes of rapid mixing, flocculation, sedimentation, rapid gravity sand filtration and disinfection/conditioning (using chlorine, hydrated lime and fluoride).

The SDWTP has undergone seven (7) upgrades since 1973. Its maximum treatment capacity has been increased from 136 MLD to 1,228 MLD. This represents a nine-fold (900%) increase in treatment capacity.

The most significant upgrades occurred from 1999, the year in which PBAPP was corporatised.

In 1999, the conventional rectangular horizontal flow settling tanks were upgraded to HDPE multi-tray settling tanks. Through this upgrade, the surface flow rate was almost doubled, from 1.5 to 2.7 metres per hour (m/hr). Moreover, the maintenance frequency of the settling tanks was reduced from a monthly interval to a bi-monthly interval.

In 2000, PBAPP acquired adjacent land to expand the SDWTP. In 2004, Package 3 of the Phase 4A saw the construction of a 114 MLD Dissolved Air Flotation (DAF) module. However, the automated DAF can only treat raw water turbidity not exceeding 300 NTU.

In 2011, PBAPP chose to implement Stainless Steel Lamella Plate (SSLP) technology for 114 MLD Package 10 (Phase 4A). The installation of automated advanced stainless steel lamella plate settling tanks (with hopper bottom process units) yielded seven key benefits:

• high treatment output and efficiency • compact module footprint; • capability to handle high turbidity raw water; • affordable build-up and treatment costs; • proven water quality; • relatively easier maintenance; and • long-term durability and reliability.

The surface flow rate can be increased to 8m/hr. The works are operated mainly in automatic mode and the maintenance of the settling tanks was reduced from bi-monthly to six-month intervals.

Table 2: Evolution of Sungai Dua Water Treatment Plant Settling Tank Technology

The evolution of the SDWTP settling tanks technology from conventional horizontal settling tanks to HDPE multi-trays, and finally, Stainless Steel Lamella Plates, have improved the surface flow rates from 1.5 m/hr to 2.7 m/hr, and finally to 8 m/hr.

In addition to this, the maintenance frequency of the settling tanks was drastically improved from monthly to bi-monthly, and finally to sixmonthly intervals. These improvements have resulted in making the SDWTP the most efficient PBAPP water treatment plant.

The good results shown by the Package 10 module led to the subsequent construction of SSLP modules for Package 11 (114 MLD) in 2011, and Package 12 (114 MLD) that was recently commissioned in March 2016.

Meanwhile, some of the existing Phase 1 and 2 HDPE multi-tray settling tanks are also being replaced with SSLP units.

4. Status Report March 2016

Table 3: Key Data on the Sungai Dua Water Treatment Plant

Type ofSettling Tanks

Conventional Horizontal TanksHDPE Multi-Tray TanksStainless Steel Lamella Plate Tanks

1.52.78.0

1.02.06.0

SurfaceFlow Rate

(m/hr)

MaintenanceFrequency(months)

a. Location Seberang Prai, Penang

c. Maximum Capacity 1,228 MLD

e. Water Quality Exceeds Standards forDrinking Water set by theMinistry of Health, Malaysia

d. Treatment Technology• 5 x Conventional Treatment Packages• 1 DAF Package

b. Raw Water Sources • Sungai Muda (primary)• Mengkuang Dam (temporarily decommissioned since 2012 to facilitate expansion project)

f. Supply Areas • Seberang Prai• Penang Island (two twin submarine pipelines)

42 Water Malaysia

ASEAN Federation of Engineering Organisations (AFEO) Awards 2015 Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) received two awards at the 33rd Conference of the ASEAN Federation of Engineering Organisations (CAFEO) on 25 November 2015.

ASEAN Federation of Engineering Organisations (AFEO) Engineering Award

The ‘ASEAN Outstanding Engineering Achievement Project Award’ (2015) was conferred upon PBAPP for its engineering achievements at the Sungai Dua Water Treatment Plant (Sungai Dua WTP) in Seberang Perai. This award recognises outstanding engineering achievements in ASEAN countries.

ASEAN Federation of Engineering Organisations (AFEO) Honorary Member Award

The second AFEO award for PBAPP is the conferment of the ‘AFEO Honorary Member’ upon PBA Holdings Bhd and PBAPP Chief Executive Officer Dato’ Ir. Jaseni Maidinsa. This award is given to persons ‘who have rendered outstanding services to the engineering profession, the institution and/or the nation.’


5. Future Plans

On 25th November 2015, PBAPP received an ‘ASEAN Outstanding Engineering Achievement Award for the Year 2015’ for design and construction of the SDWTP from the 33rd Conference of the ASEAN Federation of Engineering Organisations (CAFEO).

The SDWTP is much more than just a showcase plant. It is a strategic water installation that produces 80% of Penang’s treated water and allows PBAPP to sustain 100% urban and 99.7% rural supply coverage. This plant, more than any other, helps a water-stressed state to avoid water rationing at all costs in this age of climate change.

As such, a plot of land has been allocated for Package 12A of Phase 4A, to accommodate the proposed construction of the last water treatment module, featuring the SSLP technology, with a capacity of 136 MLD. This will ultimately increase the total capacity of the SDWTP to 1,364 MLD.

So long as Penang is dependent on Sungai Muda as its primary raw water resource, PBAPP will continue to optimise the SDWTP to meet all of its water supply needs.

PBAPP Wins Two ASEAN ‘Outstanding Engineering’ Awards

25/11/2015: PBAPP and PBAHB CEO Dato’ Ir. Jaseni Maidinsa receiving the ASEAN Outstanding Engineering Achievement Award from AFEO Chairman Dato’ Ir Lim Chow Hock

25/11/2015: The PBAPP Team at the CAFEO 33 Awards Presentation Ceremony.

The Malaysia Young Water Professionals (MyYWP) National Committees recently participated in the Australian Water Association (AWA)/IWA Young Water Professionals Conference on 18th and 19th February 2016 which was hosted by the University of New South Wales (UNSW) in Sydney, Australia. MyYWP was represented by its Chair, Mr Shamsul Fahmi Mohamad Padzli (Premier Water Services), Vice Chair, Dr Norhayati Abdullah (Universiti Teknologi Malaysia), Mr Desmond Lim (Premier Water Services) and Dr Farrah Aini Dahalan (Universiti Malaysia Perlis).

With the announcement of more than 20 speakers from across Australia and internationally from India, Malaysia and Singapore, the conference showcased several exciting and diverse YWP projects and program, bringing together the future leaders of water industry to inspire change, foster leadership and most importantly promote networking and collaborations. Following the spotlight on innovation and collaboration, the keynote speakers were Dr Marlene Kanga AM from Sydney Water, Dr Paul Pretto from Water Research Australia, Ms Gabrielle McGill the AWA Young Water Professional of the year 2015 and Dr Norhayati Abdullah in her capacity as the Chair of the IWA YWP Steering Committee. Dr Norhayati in her keynote on IWA – The YWP Network and Beyond highlighted the importance of communication to empower the network creation and collaboration as the YWPs’ future stakeholders.

With a theme of Connect, Collaborate and Create, the conference involved an exciting leadership development workshop and an interactive discussion for the YWP’s position paper on Preventing reverse flow – YWP’s vision for the future. The conference featured four thematic sessions focusing on collaborative innovation to improve water catchment management and treatment, connection and engagement with local communities to solve current and future water challenges, collaborative innovation to improve wastewater treatment and connecting to the international context. The best paper went to Paul Satur from Monash University on social inequality in water sensitive cities.

This conference connected the Malaysian delegation with young water professionals from a range of backgrounds and experiences within government, utility, research and industry environments. Throughout the conference we have had the opportunity to develop skills and discussed our vision for the future of the water sector. Congratulations to the Organizing Committees led by Kathryn Silvester and sterling commitment by Shona Fitzgerald, Robert Goedecke, Arash Zamyadi, Jim Chesterfield and Adam Kaye.

Y o u n g W a t e r P r o f e s s i o n a l s

Malaysia YWP in Sydney

43Water Malaysia

Malaysia YWP and Australian YWP at dinner by the Wharf

1. AWA/IWA Young Water Professionals Conference, John Niland Building UNSW Malaysia YWP and Australian YWP at dinner by the Wharf

2. Shamsul Fahmi, Norhayati, Farrah Aini and Desmond Lim during the opening ceremony

3. International Water Centre Leadership Development Workshop

1 2 3

44 Water Malaysia

N e w s S n i p p e t s

Single Billing System For Water Supply And Sewage Service BERNAMA - 1 MARCH 2016 LABUAN - The Ministry of Energy, Green Technology and Water introduced the integrated or single billing system for water supply and sewage service. Its minister Datuk Seri Dr Maximus Ongkili said the implementation was part of the government’s effort to enhance its green concept practice.Its also a provision under the water reform initiatives.

Regulatory Body For Restoration Of Tasik ChiniPEKAN, April 3 (Bernama) - A regulatory body to manage Tasik Chini will be set up to revitalise the second largest natural lake in Malaysia after Tasik Bera.The Tasik Chini area was at some point famous for the lake’s beauty as it was covered with lotus flowers and for the mythical Naga Seri Gumum, which drew visitors to the state by the thousands but now, it is no longer able to attract tourists.

Mud Balls To Rehabilitate Moyog River WaterwayPENAMPANG (Sabah), March 31 (Bernama) - A collaborative effort will be carried out to rehabilitate the waterway of the Moyog River here using mud balls.Community-Led Environmental Awareness for Our River (CLEAR) chairman Winnie Jimis explained that mud balls filled with effective micro-organisms were expected to help restore the quality of water in the river, a major storm drain here.

Water Crisis If Dry Spell Goes OnKUALA LUMPUR 8 April 2016 - Several states are in danger of a water crisis if the hot weather continues, says Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili. He said Sabah, Perlis, Johor and Kedah were among the states that would be affected.

“Over the next two to three weeks, if the weather continues, there may be insufficient water for treatment by the plants. Now we are praying for rain to come and are monitoring the situation very closely.

Ranhill To Tap Business Opportunities In States With High NRWKUALA LUMPUR, April 7 (Bernama) - Ranhill Water Services Sdn Bhd (RWS) has identified six states, among them were Kedah, Pahang, Sabah and Kelantan, in the country with high non-revenue water (NRW) as potential business opportunities amid the government’s commitment to tackle the issue.

A memorandum of understanding (MoU) between RWS and Canadian technology company, Echologics LLC, was signed that would allow Ranhill to tap the technologies developed by Echologics, a specialist in the development of acoustic technologies that can non-invasively detect the underground leaks.

Masterplan On Water Loss To Be Ready By Month-EndKUALA LUMPUR, April 7 (Bernama) - The Energy, Green Technology and Water Ministry will present to Cabinet a masterplan, by month-end, to control water loss due to pipe works. Datuk Seri Panglima Dr Maximus Ongkili, said the masterplan would deal with existing water operators in pipe replacement exercises in the first 10 years of its implementation.

Ongkili said the new masterplan would focus on three main aspects of setting up the base line non-revenue water (NRW) data, enhance current NRW programmes and reward water operators who performed well. “We are still struggling to lower the current 35 per cent level and we have not been able to lower the non-revenue water proportionate to the investments made in the sector,” he said.

“Tackling water woes must be done at both ends - the demand and supply within the bigger concept of integrated water resources management,” he added.

Johor’s Water Transfer Project To Benefit 485,000 Consumers The Malaysian federal government has approved the implementation of a water transfer project from the Refinery and Petrochemical Integrated Development Raw Water Supply Project (PAMER) to the Sungai Layang Dam in Johor, reported Bernama on 6 March. The RM100.6 million (US24.7M) project would benefit 485,000 consumers who need not have to endure water rationing.

Selangor To Face Critical Water ShortageKUALA LUMPUR, March 25 - Selangor will experience critical water supply for the next three years (2017-2019) following higher demand, increase in population and delay of the Langat2 Water Treatment Plant project.

Menteri Besar Datuk Seri Mohamed Azmin Ali said the state government had to build two plants, in Labohan Dagang and Semenyih, expected to start in the middle of this year and due for completion in 2017. “Langat2, scheduled for completion in 2017, is expected to be delayed and only completed in 2019.

Therefore, we have no choice but to build the two plants to meet the demand in this critical period other than the completed Mitigation 2 project.

UM Invents Its First Automated Self-Cleaning Mobile Water FilterKUALA LUMPUR, April 5 (Bernama) - University of Malaya (UM) has invented its first automated self-cleaning mobile ultrafiltration water filter system to produce clean water from different sources of water.

Its Institute of Graduate Studies deputy dean, Prof Dr Mohamed Kheireddine Aroua said Minister in the Prime Minister’s Department Datuk Joseph Entulu Belaun is expected to launch the innovation on April 9 at Rumah Himpunan Senabong, Sarawak.

45Water Malaysia

N e w s S n i p p e t s

“Water from the river, lake, well and even flood can be used on the filter system. Our team has tested the equipment during the floods in 2014 and it is still working fine until now,” he told Bernama here.

YLI Banks On Langat 2 Job To PutIt Back Into The BlackSaturday, 26 March 2016 - PIPE maker YLI Holdings Bhd is relying on its new RM97.3mil Langat 2 treatment plant job to propel the company back into profit after posting losses for its 2015 financial year.

The group is also eyeing more water pipe supply projects in Selangor.

YLI secured this RM97.3mil deal through its 51% owned subsidiary Laksana Wibawa Sdn Bhd, and is for the supply of new water pipes over a 35-km stretch.

Ranhill’s Expansion Into China Water Project Ranhill (Yongxin) Water Co Ltd inked a PPP concession agreement with the Yongxin County Industrial Development Zone Management Council for a wastewater treatment project worth RM31.5M. The WWTP will have a 10-megalitre-per day treatment capacity and the 29-year water concession agreement was inked on March 9.

Ranhill Holdings Berhad has reaped a gross IPO proceeds of RM386.8M and the listing date on Bursa Malaysia Main Market is 16 March 2016 and secured RM60M via management buyout following RTO of Symphony House Bhd.

Negri Mulls Construction Of Its Eighth DamSeremban 31 March 2016. Negri Sembilan is considering its eighth dam, in the Sg, Jerang Valley in Jelebu, to meet its increasing demand for treated water. Another option is for the state to buy raw water from Pahang to be piped via a tunnel through the Titiwangsa mountain range.Mentri Besar Dato Seri Mohamad Hasan said although the state has sufficient supply of treated water for the next 10 years, demand was expected to increase with new townships and industrial areas.

A feasibility study will be conducted in the next six months to decide in the better option.

High Tech Approach To Monitoring RiversCAMERON HIGHLANDS: 10 March 2016 The National Hydraulic Research Institute of Malaysia (NAHRIM) has invented a gadget to monitor water movement, detect flood alerts and intrusions. Known as Intelligent River Guard (INTRiGUARD), it is the first equipment to be used in rivers in the country with

Sungai Bertam being the first testing ground.For a start, 300 markers costing RM1 million will be planted 20 metres from the river within six months and increased to 2,000 by two years.

KPS enters JV to maintain water pipelinesStarBiz Monday, 21 March 2016 KUALA LUMPUR: Kumpulan Perangsang Selangor Bhd (KPS) plans to participate

in the non-revenue water (NRW) reduction programme under the Federal Government and Selangor state. KPS, a subsidiary of Selangor state investment arm Kumpulan Darul Ehsan Bhd (KDEB), told Bursa Malaysia that its unit Nadi Biru Sdn Bhd proposed to invest 51% in the equity of Smartpipe Technology Sdn Bhd (SPT) for RM5.1mil.

SPT is an engineering company offering integrated solutions to water and other utility companies for the maintenance of their pipeline assets in order to reduce NRW. Dutch firm Wavin Overseas BV has given SPT a licence to market, sell and install plastic pipes systems and other patented products in Malaysia together with the right to use the know-how subject to the terms and conditions set out in the licence agreement signed in November last year.

Taliworks exits China, gains solid waste concession in M’siaFriday, 26 February 2016KUALA LUMPUR: Taliworks Corp Bhd, realigning its strategy to focus on mature operational cash-generating utilities and infrastructure businesses, is selling its entire China investments - including concessions to operate five wastewater treatment plants and a waste transfer facility - for US$54.6mil (RM230.4mil). The company also proposed to acquire, for RM245mil, a 35% equity stake in SWM Environment Holdings Sdn Bhd, which has a 22-year concession to provide solid waste collection services in the states of Negri Sembilan, Malacca and Johor and public cleansing management services within the specified cleansing zones.

In a filing with Bursa Malaysia, Taliworks said it proposed to dispose of Taliworks International Ltd (TIL), Taliworks (Sichuan) Ltd (TSL) (80% stake) and SWM Technologies (M) Sdn Bhd (SWMT) to LGB Group (HK) Ltd.

CIMB: Revival likely of water infra in 2016STARBIZ Tuesday, 12 April 2016 KUALA LUMPUR: CIMB Research sees high possibility of a revival of water infra theme this year while water contracts could be revived from this year. “Water infra is one of the three segments that we are positive about in 2016. A revival of this theme looks more likely this year,” the research house said.

It said negotiations to acquire Gamuda Bhd’s 40%-owned Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) were back on track. CIMB said news that negotiations were back on track is a positive surprise as there had been too much pessimism since late-2015, with no leads up to this point. The reported RM2.8bil value for Splash equals one time price-to-book value (P/BV), a standardised valuation parameter for past water acquisitions nationwide. “This implies that Gamuda could take home RM1.2bil in cash,” CIMB said.

In addition, the Government also said that a new masterplan for nationwide non-revenue water (NRW) works would be launched by month-end (April 2016). It said water pipe manufacturers that were likely to benefit strongly from the new NRW masterplan were Engtex Group Bhd, YLI Holdings Bhd, Hiap Teck Venture Bhd and Jaks Resources Bhd. The launch of the masterplan could kick off a slew of new pipe replacement works nationwide. Contract values are unknown at this point, CIMB said. It added that the targeted 25% average nationwide NRW by 2020 suggests that sizeable NRW service contracts could be in the pipeline from 2016 onwards.

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