Malaysia – Selangor water crisis – the folly of privatization

Posted in: Drinking Water News, Water Crisis
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Article courtesy of  | January 10, 2013 | Anilnetto.com | Shared as educational material only

What is happening now in Selangor – the ongoing water crisis – reflects the utter failure of the water privatisation policy.

The result of the privatisation of water services to well-connected companies is now there for all to see.

Compare what is happening to water in Selangor to the situation in Penang, where water is for the most part owned by the state (55 per cent), Penang Development Corporation (10 per cent). Minority stakes are owned by other smaller agencies and the public.

Penang’s average domestic tariff of 31 sen per litre is the lowest in the country. Despite the low tariffs, per capita domestic consumption dropped from 291 litres per capita per day in 2010 to 285 in 2011.

And despite the low water tariffs and lower domestic consumption of water, profit before tax soared from RM30.8m in 2010 to RM42.4m in 2011.

A big part of the secret is that non-revenue water (water that is not billed – e.g. leakages, theft etc) was only 18.4 per cent in 2011. That’s impressive by any standards. It is also half the Malaysian national average of 36.4 per cent in 2010.

Check out the PBAPP (Penang)’s profit for 2011 below:

Water crisis: India Selangor water crisis the folly of privatization.

Despite the low water tariffs, I can’t remember the last time the Penang suffered a major water crisis, can you?

And yet, compare what the CEO of PBAPP earns compared to what, say, the Puncak Niaga boss receives.

Still think privatised water services are better?

So who was the wise guy who inspired the privatisation bandwagon in Malaysia? None other than former premier Mahathir!

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