Media statement by Lim Guan Eng in Komtar, George Town on Wednesday, 22^nd September 2010: 

PBAPP will impose water conservation surcharge for domestic consumers 

The Cabinet has approved Water Conservation Surcharge (WCS) which will be implemented in the state of Penang from 1 November 2010 as part of the effort to encourage wise water usage and to curb water wastage among the people of Penang.

Penang is the first state in the country to move towards motivating domestic consumers to use less water through WCS.

The new rate for WCS is 24 cent per cubic meter for water consumed over and above the allowance of 35 cubic meter per month which is equivalent to 70 cubic meter per bi-monthly billing cycle or water bill of RM21.40. This allowance of 35 cubic meters will help to reduce our daily water consumption from 286 litres per day to 233 litres per day.

70% of domestic consumers in Penang will not be affected with the implementation of WCS. 30% of domestic consumers have been identified as wasting water usage in excess of our targeted monthly allowance of 35 cubic meters.

The new rate is effective for consumption from 1 November 2010 and it will be reflected in the consumers' bill from 1 January 2011. Only those who use too much water will pay more for their water supply. If the household usage is reasonable, this surcharge will not affect the people. However, if the people are using too much water, they will pay more for their water. This is only fair.

Penang's water tariffs is amongst the lowest in Malaysia and ASEAN, were last reviewed nine years ago. Since then, the cost of supplying water in Penang had increased by 64%, in tandem with increases in the costs of energy, fuel, chemical and maintenance.

The price for maintaining the lowest domestic water tariffs in Malaysia is being borne by PBAPP. In fact, PBAPP is "selling" tap water to 80% of all of its domestic consumers in Penang at a price that is lower than cost. In 2009, a total of 395,388 domestic consumers enjoyed water subsidies. The cost to PBAPP was RM41.0 million.

Three key objectives of the WCS are:

• encourage domestic water consumers in Penang to stop wasting tap water;

• ensure that Penangites do not abuse the domestic water subsidy that they currently enjoy; and

• promote a water saving culture in Penang that could save the state millions, or even billions, of ringgit in investments for water infrastructure projects for the future.

WCS has to be introduced in Penang as Penangites' water consumption per day is too high ie 286 liters per day, which is above the National average of 205 liters per day, Singaporean consumed 155 liters per day while world average consumption is 165 liters per day. WCS is one of the ways to curb water wastage, encourage wiser usage, promote ways to save water and conserve water resources in Penang.

*Lim Guan Eng, DAP Secretary General, Penang Chief Minister & MP for Bagan