On Meeting the

Challenges of A
Water Crisis

Prof. Dato’ Dr. Ho Sinn-Chye

Wawasan Open University
http://www.wou.edu.my
 Talking Points

1. Brief overview of Malaysia’s

water industry
2. Pertinent water resource issues
and challenges
3. Building a water literate urban
society
Distribution of Earth’s Water

97%
saline
water
How should we perceive water?

• As a finite natural resource

• As a strategic resource
• As a limiting factor to economic
growth
• As our life-line
 “… A shortage of water resources could spell increased conflicts
in the future. Population growth will make the problem worse. So
will climate change. As the global economy grows, so will its
thirst. Many conflicts lie just over the horizon.”
World Economic Forum, Davos, Switzerland, Jan 2007

“… the Government will focus on the quality, coverage and

reliability of water supply. Water supply infrastructure will be built
and upgraded. It will allocate RM1.48 billion to rehabilitate the
distribution network to reduce the rate of non-revenue water from
38% in 2005 to 30% in 2010.” 9th Malaysia Plan, Mar 2006

“… we in Penang must never forget that our State is not rich in

water resources. Yes, we are richer economically and in terms of
industrial development, but we are “Poor” in water resources as
80% of our water supply flows in from the Sungai Muda which has
its catchments in Kedah.” World Water Day, Apr 2007

“… Penang State will face a water crisis by 2012 if the RM 1.2

billion expansion project of Mengkuang Dam did not take off by
2010. The State’s current water capacity would not be able to
meet the rising demand due to population growth (1.52 million)
and rapid industrialization.” The STAR, Aug 2008
 Why such Critical Concerns?
1) Water resource demand has surpassed
sustainable levels of supply in many
areas.
2) Economic development has degraded
water quality and the natural environment.
3) New water resources are increasingly
expensive to develop.
4) Funding has become a serious limiting
factor.
 Why such Critical Concerns?
5) Deteriorating quality and quantity of water
has adversely affected our ecosystems.
6) Inadequate knowledge base and support in
integrated technically sound management.
7) Inadequate public awareness, support and
commitment in sustainable water use.
8) Global warming will deepen water crisis
making it intolerable.
Overview of Malaysia’s
Water Industry
Nationalization of Malaysia’s
Water Assets
Key Components of the Water Industry
8 1 Begin here
Value
Evapo- Chain
Rain falling
transpiration on water
from oceans catchment
Treated and plants areas
7 2
effluents
discharged Dams and
into rivers impoundments
and seas

Sewerage Water
and sludge treatment
treatment plants
6 plants Water 3
supply Service
reticulation reservoirs
and sewer
network
5 4
 Types of Water Supply Institutions
PUBLIC WATER CO. JOINT VENTURE DIVESTITURE
PRIVATE

Penang (PBA) Penang (PBA)

Selangor (PUAS)
Johor (SAJ Holdings) CONCESSION
Kelantan (Air Kelantan) Johor (SAJ Holdings)
Kelantan (Air Kelantan)

BOT, BOOT, BOLT, etc.

CORPORATISATION Selangor: SSP2 Puncak Niaga; SSP3 SPLASH
Terengganu (SATU) Sabah: JETAMA, TIMATCH, Lahat Datu
MIXED

Sarawak (LAKU) Perak: MUC, Innovest Lyonnaise

Johor: Equiventures

MANAGEMENT CONTRACTS
Puncak Niaga, ABASS, SPLASH, Taliworks,
Air Utara, Encorp Utilities, Southern Water
STATE WATER
ENTITIES
SERVICE
PUBLIC

Perlis, Perak, Melaka

Pahang, Sabah, Sarawak, CONTRACTS
Labuan, N. Sembilan, Kedah,

PUBLIC MIXED PRIVATE

(Leased)
Main Challenges of 9th Malaysia Plan
for the Water Sector
1. To deliver facilities or services of a high
quality
2. To ensure an efficient and effective
delivery system to meet the rising
aspirations of the people
3. To optimize the use of water resources
as well as protecting the environment
Five strategic action plans under
the 9th Malaysia Plan
1. Rehabilitation of Water Supply Systems
2. Modernization of Water Supply Systems
3. Water Resources Development
4. Water Treatment & Distribution
5. Inter-State Raw Water Transfer
 Restructuring of Federal Ministries*
WATER SERVICE SECTOR
 Ministry of Energy, Water and Communication (to improve
water services sector)
• Water supply services (formerly Ministry of Works)
• Sewerage services (formerly Department of Sewerage
Services, Ministry of Housing and Local Government)
WATER RESOURCE SECTOR
 Ministry of Natural Resources and Environment (to improve
water quality and aquatic resource conservation).
• Surface water drainage control and flood forecasting
(DID, formerly under Ministry of Agriculture)
• Groundwater resources (Department of Mineral and
Geoscience)
* 27 March 2004
 Setting the enabling environment

With Constitution Amendments (2005)

Passing of two important Bills
1. Water Service Industry Act (2006)
2. National Water Services Commission
Act (2006)
(Both Bills were passed on 10 May 2006.
They provide a policy and legal framework for
the regulation of the water supply industry.)
 Water Services Industry Act (2006)
• To provide for and regulate water supply services
and sewerage services.
• To establish a licensing and regulatory framework
for regulatory intervention to promote the national
policy objectives for the water supply services and
sewerage services industry.
• The Act does not encroach nor does it affect the
general application of existing laws on
environmental quality and land matters and
existing State powers over the water source.
National Water Services Commission Act

The National Water Services Commission

Act (2006) enabled the establishment of a
corporate body, named “Suruhanjaya
Perkhidmatan Air Negara “ (SPAN).
SPAN is empowered to supervise and
regulate the water supply services and
sewerage services and to enforce the
water supply and sewerage services laws
and related matters.
 SPAN as an Economic & Technical
Regulator of the Water Industry

• SPAN will oversee, regulate, monitor and

maintain uniformity in the country’s water
sector.
• It will address issues such as poor water
quality, no supply, loss in earnings due to
non-revenue water via leaks, water thefts
and unpaid bills and the disparity in tariffs
among states and poor enforcement.
 Water Asset Management Company
(WAMCo or PAAB*)

• PAAB addresses the funding requirement

of the water industry.
• It builds infrastructures (e.g. dams, weirs,
treatment plants, etc.) to tap raw water and
lease them to service providers.
• The service providers are to focus on just
operations and maintenance only.

* Pengurusan Aset Air Berhad, Ministry of Finance

 Responsible W.S. Institutions
Institution Responsibility Description
Federal Policy matters Development of a holistic water policy
Government for the country by setting policy
directions.
State Water basin and raw Regulate raw water abstraction and
Government water matters catchment management. Identifying
new water basins when required.
Nat. Water Water resource Ensures coordination with the various
Resources matters, governance, State governments in the
Council interstate issues. management of the water basin.
SPAN Regulatory matters Regulate the water services industry
National Water Services
Commission
(water and sewerage).

PAAB WAMCo Asset matters Manage existing water assets and

develop future assets.
Current Water Sector Regulatory Structure

Ministry of Energy, Ministry of Finance

Water and
Communications

SPAN PAAB
Issues
licenses
Regulates, Monitors Builds and owns
water services
Concession Licensed infrastructures
Holders Operators

Water Assets
 Impacts on the Water Service Industry
1. Federal Government takes over control and
regulation of water supply and sewerage services
from States.
2. Water supply and sewerage services will be jointly
regulated.
3. Certifying agencies will be set up to approve
plans, certify contractors and monitor compliance
with subsidiary legislation.
4. All water industry players must be licensed to treat
water, distribute it and own a facility.
 Impacts on the Water Service Industry

5. Current concession holders can migrate to the

licensing system by re-negotiating their
agreements with the Commission within a specific
limit of time (deadline 31 Dec 2009).
6. Targets will be set for service providers on non-
revenue water, handling of consumers,
compliance with water qualities requirements, etc.
 Revenue – Cost Deficit

Year Expenditure Revenue Deficit (RM

(RM Million) (RM Million) Million)
2000 1787 1896 +109

2001 2765 2227 -538

2002 2688 2447 -241

2003 3150 2747 -403

2004 3502 3056 -446

2005 3416 3575 +159

Source: SPAN 2007

 Water Resource
Issues and Challenges
“Planning for well-being
rather than calamity”
Challenges to Life and Well-Being
• Basic needs (safe and clean water
supply)
• Ecosystem protection (water pollution)
• Urban water supply (domestic,
commercial and industrial uses)
• Securing food supply (water irrigation)
• Industrial needs (wastewater treatment,
recycling for non-portable use)
• Hydro-electric power generation
 Management Challenges
• Risk management (erosion, floods,
storms, droughts, climate change)
• Sharing water resource (fair policies)
• Valuing water (pricing, equity, poverty
line)
• Enhancing knowledge base and
disseminating information
• Governing water wisely (institutional
capacity, civil society participation, urban
decentralization)
 Water Resource Issues in Malaysia
• Pollution
• Dams
• Inter-State Raw Water Transfer
• Non-Revenue Water
• Water Conservation Strategies
• Integrated River Basin Management
• Watershed Protection
• Public Awareness, Education & Empowerment
 Quality Trend of River Basin (1990-2005)
Number of Rivers

Year

Source: Malaysia Water Industry Guide (2007)

Pahang - Selangor Raw Water Transfer

4 Km
h :4
n gt
Le
 Water
Catchment
Area

Supplies
80% of
Penang’s
water need

Securing water for Kedah-P.Pinang

Inter-State Raw
Pulau Pinang
Water Transfer
Note: P. Pinang consumed 262 x 106 m3 water in 2007.
 Calculated Non-Revenue Water 2005

Causes: 1) Leakages
2) Meter under-registration
Percentage Wastage

3) Pilferages

Pulau
Pinang
19.4%
(2007)

States

Source: Malaysia Water Industry Guide (2007)

 Examples of Average Domestic and Industry
Water Tariffs (RM/m3 calculated for first 35 m3)
State Domestic Rate Industry Rate
Kelantan (2001)* 0.55 1.25
P. Pinang (2001) 0.31 0.94
Sarawak (1992) 0.56 1.19
Selangor (2001) 0.77 2.27
Sabah (1982) 0.90 0.90
Johor (2003) 0.90 2.93
Note: (a) Higher rates for higher consumption to discourage wastage
(b) Cross-subsidy for domestic consumers by industrial consumers
(c) Very low “lifeline” rate to accommodate lower-income consumers

* revised tariff year Source: Malaysian Water Association (2004)

 Urban Water Demand Management
Demand management is an important element
of the water industry. It aims to reduce water
loss and increase water-use efficiency.
Ways to achieve this include:
• Water restrictions (short-term)
• Water conservation (long-term)
• Best practice water pricing
• Water use efficiency
• Water recycling, harvesting rainwater
 Our Shared Vision
Our freshwater ecosystems are safeguarded
in a way that is consistent with the socio-
economic aspirations of our people through
innovative use of science and technology to
conserve the rich aquatic resources in the
interest of sustainable development.
 An Integrated Approach
Enhancing the
RESOURCE-USE PROBLEMS sustainable
development of
water resources
Natural Social and the aquatic
Processes Processes
environment
Economic
Processes

Integrated River Basin

Management
Definition of “Sustainability”

“… improving the quality of

human life while living within
the carrying capacity of
supporting ecosystems.”

Source: IUCN / UNEP / WWF.

Caring for the Earth: A Strategy for Sustainable
Living. (Gland, Switzerland 1991)
 Sustainable Development
The challenge of sustainable development
arises from these two major converging trends
Decline in resource availability
and ecosystems
Diminishing
margin for Sustainability
action

Impact = Population x Consumption

x Technology
 Rivers and their Watersheds
They perform many vital functions
• as:
water capacitors, buffers and connectors
• life support habitats
• cradles of biodiversity
• stabilizers of local climatic conditions
• nutrient regulators.
Inter-relationship between ecosystem structure,
processes, functions, attributes and values

RIVER BASIN / WATERSHED ECOSYSTEM STRUCTURE

1. Geomorphology 3. Hydrology
2. Soil 4. Microbes, plants & animals

ATTRIBUTES
1. Biodiversity
PROCESSES FUNCTIONS
2. Natural heritage
1. Physical 1. Hydrological
3. Cultural heritage
2. Chemical 2. Biogeochemical
4. Scientific value
3. Biological 3. Ecological
5. Knowledge pool

VALUE TO SOCIETY
a) Services b) Goods
1. Irrigation & flood control 1. Timber & non-timber products
2. Water quality maintenance 2. Medicine, genetic resources
3. Carbon & nutrient cycles 3. Fish, birds & other wildlife
4. Habitats & food chain support 4. Eco- and agro-tourism
 Response of ecosystem structure and
function to a disturbance
ECOSYSTEM STRUCTURE AND FUNCTION

Normal
multiple
states
operating
Measure of range
Resistance

Measure of Degradation
Resilience (No Recovery)

TIME
Disturbance Recovery
Freshwater Research
National authorities and resource
managers need sound scientific
data and timely information on
which to base their projections
and decision-making.
Elements of a Freshwater Research Strategy
for meeting Critical National Water Needs
The Fundamental Challenge:
The national need to build an ever-improving
predictive understanding of water resources
and freshwater ecosystems.

The Response: A national strategy for freshwater:

Research / Applications / Technology Transfer / Education
and Outreach

The Strategic Goal:

To ensure that water resources decision makers have adequate
and timely information to protect, utilize, and enhance the nation’s
water resources

National Freshwater Issues:

Biological Impoverishment / Altered hydrological regimes / Risks to
human health and quality of life
Integrating freshwater research priorities
with management needs
1) How can we predict environmental change
resulting from alterations in the hydrologic regime?
2) How can we ascribe economic values to our
aquatic ecosystems not only in terms of the goods
and services they provide but also the equally
important non-use values (e.g. bequest value)?
3) How can we build a research network that
facilitates rapid and effective response to tackling
new emerging water resource issues?
4) … and so on.
 RESEARCH ELEMENTS IN WATER RESOURCE MANAGEMENT

Research on modified MODELLING

hydrologic flow patterns and
their effects
Integrated research on
controlling processes
Research on physical,
chemical and biological
properties
MANAGEMENT
APPLICATIONS
Research on ecological
properties
YES

NO EVALUATION NO
Are mitigation efforts meeting
management objectives and targets?
 On building a water
literate urban society
 To modify water-use behavior
 To encourage voluntary water
conservation
 Public Awareness and Education Activities

• Education programmes (printed, multimedia, CDs)

• Participative planning (EIAs, urban dev. projects)
• Learning with NGOs (e.g. MNS, WWF, WI, WWP)
• Competitions, awards, recognition programmes
• Demonstration cities and information centers
• Face-to-Face marketing with major water users
• Social marketing campaigns, news media, TV
• Published materials (“How to” series)
• School programmes (projects, posters), etc …
 Parting Shot

On moving us from
awareness to
acceptance, then
commitment
Levels of Commitment
(Patterson-Conner Model)
Six Messages from Fullan about Change
1. If people cannot find meaning in any reform it
cannot have an impact.
2. Existing strategies will not get us to where we
want to go.
3. Although short-term gains can be achieved by
standards-based reform it is deadly if the
conclusion is that organizations should do more
of the same.
4. The ‘learning organization/community’ is more
than a cliché. It has to be pursued actively.
5. We need to consider the collective good.
6. We have to learn to live with change.
 Thank You

Prof. Dato’ Dr. Ho Sinn-Chye

Wawasan Open University
http://www.wou.edu.my