Address water risks aggressively

EFFECTIVE management of water resources is critical to business sustainability and investments. The Federation of Malaysian Manufacturers (FMM) commends the deputy prime minister on his astute observation that despite having 907 billion m³ of rainfall a year, Malaysia is still faced with water shortages in some states at certain times of the year. We support his call for improved focus on addressing the issue.

Water rationing and unscheduled interruptions had adversely affected manufacturing production, resulting in losses due to reduction in production and foregone orders. Investor confidence has also been affected. Industries operate in anxiety over a repeat of the 2014 water crisis in Negri Sembilan and Selangor which lasted from February to August. The current hot spell is of great concern.

It was reported in August 2016 that the World Resources Institute, which developed the Aqueduct Water Risk Atlas, had projected a 1.4-fold increase in water stress levels for areas in Kedah, Penang, Kelantan, Perak, Selangor, Kuala Lumpur, Malacca, Negri Sembilan and Johor by 2020.

The average score for Malaysia's baseline water stress is 2.1 ie at medium to high stress. Water stress for the industrial sector is 2.2. The score measures exposure of water users to 12 risk indicators, covering quantity, quality and regulatory and reputational risks such as floods, drought severity, upstream storage, groundwater stress, upstream protected land, return flow rain, etc. Rainfall has been declining and the decline is forecasted to continue.

Non-revenue water (NRW) losses through leakages, burst pipes and theft average 40%. Expeditious action is needed. Likewise, other supply-related factors such as arresting pollution of rivers, preventing further deforestation of catchment areas and improving maintenance of water plants require prompt action.

Besides addressing the supply side, the government must also consider demand and usage. Our water tariffs are among the lowest in the Asean region. Domestic tariffs should reflect the true cost of water to reduce wastage and encourage conservation. Tariffs should also be sufficient to raise money for the necessary capital expenditure such as addressing the NRW losses. In this respect, the government should consider streamlining and federalising the management of water like electricity.

The government must also consider incentives to support industry's investment in cleaner technologies, water treatment facilities, water saving devices, rainwater harvesting, and extraction of underground resources.

We hope the DPM will lead the initiative to transform the management of water in Malaysia. We need to take urgent attention to ensure our aspiration to be a developed nation is not hampered.

Tan Sri Dr Lim Wee Chai
President
FMM