Green equilibrium water and sustainable development

WORLD Water Day is celebrated every March 22 to mark the importance of water in our survival. This year's theme is 'Water and Sustainable Development'. This covers almost all of our activities from water resource management, water supply and usage efficiency as well as wastewater management. It's a cycle, a vicious cycle it is becoming!
What's Malaysia's role and where do we go from here after decades of chewing water issues?
Back to basics, water catchment areas protection is vital to ensure we have sufficient raw water supply for the increasing population and economic activities. Deforestation has threatened raw water supply and also becomes a cause of massive flooding with mud.
The National Water Services Industry Restructuring (NWSIR) via Water Services Industry Act 2006 (WSIA) model should have been completed during 9th Malaysia Plan but it has not been completed till date. Delay in NWSIR has huge financial and operational implications to our water services industry because many countries in Asia are beefing up their water services infrastructure development. Cost to improve the industry will be the main concern!
Water services industry includes water treatment, water supply and sewerage services. Issues related to industry structure, cost efficiency, transparency, old infrastructure, high Non-Revenue Water (NRW), failure in privatisation and tariff structure were the main reasons federal government pursued with implementation of WSIA model for Peninsular Malaysia and Labuan. Association of Water and Energy Research Malaysia (Awer) has suggested Sabah and Sarawak to be part of the current process numerous times.
Besides this, Pengurusan Aset Air Bhd (PAAB) is a temporary set up to assist rapid development and replacement of aged infrastructure while minimising impact to tariff. National Water Services Commission (SPAN) will regulate water services industry and PAAB in terms of technical, service quality and economic.
Last year, Suruhanjaya Perkhidmatan Air Negara (SPAN) confirmed that the transparent tariff setting mechanism proposed by Awer will be implemented. Once the Regulatory Water Accounting is completed, water services industry will only pass efficient operational costs that are benchmarked at the lowest cost for preset criteria.
Awer estimates loss of revenue due to NRW is more than 1/3 of revenue collected by water services industry annually.
Between 2008 and 2013, the total estimated loss of revenue due to NRW is a staggering RM 10.808 Billion. If water tariffs are adjusted to reflect real cost, the losses due to NRW is far greater. One main task for SPAN is to improve operational efficiency and Awer has set a KPI of 20% national NRW target by 2020 for SPAN compared to the current NRW level at 36.6% in 2013. If proper engineering approaches and measures are deployed, NRW reduction can be done more effectively at a shorter period of time and a much palatable cost. It needs - planning!
In addition to that, Indah Water Konsortium (IWK) will also be restructured under WSIA model and eventually will be broken to be merged with state water operator to ensure environmental and economic sustainability.
How does NWSIR benefit Malaysia in the longer run? Availability of continuous treated water supply is one of the criteria that investors and businesses consider before they plant-up or move or even expand operation. Under WSIA model, the services, operational standards and tariffs will be standardised and improved to reflect operational efficiency and infrastructure development.
Meanwhile, WSIA model can be replicated by many developing nations around the world. Success in WSIA model implementation in Malaysia will improve consultancy, services related business and human capital development. This will allow expertise and knowledge from Malaysia as well as its water services industry model to be used in many other nations and generate income for Malaysia.
This article was contributed by Piarapakaran S, president of the Association of Water and Energy Research Malaysia (Awer), a non-government organisation involved in research and development in the fields of water, energy and environment.