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The government has agreed to extend the concession agreement with Indah Water Konsortium (IWK) Sdn Bhd for another 12 years, until Dec 31, 2034, said Environment and Water Minister Tuan Ibrahim Tuan Man.
Tuan Ibrahim said the current agreement with IWK was scheduled to end on March 31 next year, but it was extended based on IWK's excellent performance in managing the country’s sewerage system and assets, which included more than 7,000 sewage treatment plants and sewage pipes stretching 22,000km.
He said IWK was also tasked with maintaining about 1.3 million individual septic tanks as well as more than 800,000 traditional toilet tanks.
“IWK's main challenge is to ensure that all the sewerage assets operate optimally and at the same time, upgrade the system and bring in new equipment,” he said after witnessing the signing ceremony of the agreement virtually in Kuala Lumpur today.
Since IWK started operating in 1993, he said, the tariff for sewerage services to consumers had never been reviewed.
He said the average maintenance cost of the sewerage system for linked premises was about RM17 per month compared to the current tariff of between RM2 and RM8 per month.
"Based on a study, a review of sewerage service tariffs should be considered to balance the cost of maintaining old assets, increased in electricity tariff and the emergence of new environmental threats.
“IWK needs stable financial resources through a sustainable business operation plan, as well as financial assistance from the federal government. The sustainability of water resources and public health is highly dependent on IWK's financial capability in carrying out its responsibilities,” he added.
Under the new agreement, he said, IWK would also have the opportunity to explore non-tariff business activities.
“For example, the production of recyclable water from sewerage bi-products so that it can be supplied to industries as an alternative water source,” he added.
Tuan Ibrahim said he was optimistic that the implementation of alternative non-tariff-based business activities and the proposed review of the sewerage charges would enable IWK to ensure the public sewerage system remained good and efficient and no longer rely on government financial assistance.