THE Penang Water Supply Corporation (PBAPP) has been selling water to domestic consumers below its production cost since it was corporatised 25 years ago, Chief Minister Chow Kon Yeow said.
“While the production cost per m³ of water is RM1.30 this year (2024), domestic consumers are only paying 62sen (for the first tier of 0-20m³).
“What does it mean when you are selling water below the production cost? It is a subsidy or a rebate,” he told the State Legislative Assembly in his winding-up speech today.
Detailing the rebates, Chow said PBAPP subsidised RM133 million in 2019; RM96.69 million (2020); RM98.53 million (2021); RM105.71 million (2022); and RM116.44 million in 2023.
“The subsidy or rebate for domestic water consumers has been increasing yearly.
“Over the five years (from 2019 to 2023), PBAPP has subsidised over half a billion Ringgit.
“PBAPP also subsidised RM17.75 million for PPRT (Housing Project for the Hardcore Poor) water consumers, houses of worship (RIBI), schools and others over the same period (from 2019 to 2023),” he said.
Chow emphasised that despite the increase in water bills from Feb 1, this year, PBAPP was still subsidising the domestic water consumers in the state.
“The rebate or subsidy for domestic water consumers this year will be about RM76 million,” he explained, adding that PBAPP was also implementing eight crucial water supply projects listed under the PBAPP 2030 Water Contingency Plan, better known as WCP 2030.
It was reported that the Penang government, through the PBAPP, has planned to invest about RM1.185 billion in important water supply projects over the next five years (from 2023).
Chow hoped for everyone’s understanding of the need to reduce the subsidy given.
“The water rates for domestic consumers have not been reviewed for 30 years.
“If I choose not to review it, my successor will also be facing the same situation later.
“Please understand that we do not wish to anger the consumers,” Chow, who is also the PBAPP chairman, said.
Lim Guan Eng (PH-Air Putih) interjected and explained that the people were angry over the huge increase in domestic water rates.
“I appeal to you to consider providing an additional rebate of 20sen, reducing the current rate from 62sen, for a period of one year.
“This will allow domestic water consumers to acclimate to the higher water rates before implementing the full 62sen rate after one year,” Lim said.
Several assemblymen, from Batu Lancang, Air Itam, Bagan Jermal, Bagan Dalam, Berapit and Machang Bubuk, supported the appeal.
Chow quoted Kebun Bunga assemblyman: “There is no right time to make an unpopular decision.”
“Who can guarantee that there will not be complaints next year?” Chow added.
Chow explained that the current domestic water rates in Penang with effect from Feb 1 were in compliance with the Federal Government Regulations.
The Water Services Industry (Rates for Water Supply Services) (State of Penang) (Amendment) Regulations were published on Jan 31.
“We will refer the matter to the Penang Legal Adviser,” Chow said before wrapping up his speech.
The State Legislative Assembly was adjourned sine die at 4.33pm.