KUALA LUMPUR: The Penang government’s move to increase water rates by 77 per cent for consumers and 58 per cent for businesses clearly shows that it is desperate for money.
Barisan Nasional Strategic Communications Team in a statement said it is learnt that during the Penang government exco meeting held on Oct 26 last year, another round of broad-based water rates increases has been approved, similar to the one implemented on Apr 1, 2015.
“An official request was submitted by the Penang government to the Federal water authorities on Dec 23 last year to seek approval for an increase of water rates effective April 1, this year.”
It is estimated that the move to increase water rates will see water bill for a factory in Penang to jump up by RM88,000 a month or by 45 per cent from RM196,000 to RM284,000 a month.
Five stars hotels could also see its monthly water bill soar by RM22,000 per month from RM48,000 to RM70,000 per month.
Small businesses are also set to see their water cost rise substantially, where an average restaurant could see a hike of 46 per cent from RM6,700 to RM9,900, while hair salons are set to see a 58 per cent increase from RM730 to RM1200 per month.
One of the main reasons given to justify the increase was that Penang Water Supply Corporation’s (PBAPP) spending had greatly increased and without this broad-based water rates hike, PBAPP is projected to lose money, despite the Chief Minister Office pumping a RM30 million emergency loan into PBAPP.
However, a subsequent letter issued in February had requested for the new rates request to be withdrawn – possibly for political reasons.
“It was then replaced with a revised request for a milder increase in water rates which seeks to more than double the water conservation rate charges from 48 sen per unit to RM1 per unit.
“This doubling of water conservation surcharge was confirmed by the Penang state government in April but it is expected to bring in much less revenue for PBAPP compared to the earlier broad-based increase.”
Prior to that, the Penang government had already raised water rates four times from 2008 to last year.
It is reflected again that the Penang government is desperate for money through Lim’s stand to maintain its own hotel tax on top of the proposed Tourism Tax (TTx).
“He had complained that the TTx rate is too high, yet he still insisted to maintain the state’s own hotel tax, allowing them to benefit from a double tax revenue flow into the state.”
There is a concern that after the 14th General Election (GE14), the Penang government will revive the earlier broad-based water rates increase to avoid losses at PBAPP – especially as the overall Penang state government yearly operating expenses have increased by 500 per cent since 2008. An exco member had also stated that there is not much state land left to sell in Penang.
“Thus, we call on the Penang government to confirm or deny that there was such a decision by the exco members for a broad-based increase in water rates in September last year.
“We also call on DAP to give assurances to the consumers and businesses in Penang that water rates will not see a further increase should they be voted back into power in the GE14.”