INDAH Water Konsortium (IWK) is responsible for developing and maintaining an efficient sewerage system in Malaysia.
In fact, the sewerage company treats a total of 5 billion litres of wastewater daily - that's equivalent to 2,000 Olympic-sized swimming pools!
Incepted as a private company and awarded the concession by the Ministry of Finance in 2000 for our nationwide sewerage services, IWK manages the sewerage of more than 26.5 million people. A sewage treatment plant treats wastewater by removing harmful compounds before releasing it into the water cycle, and is important for public sanitation and environmental preservation.
Here's why good sewage treatment is important:
- It helps prevent the spread of water-borne diseases
- It encourages potential investors to set up factories
- During a water shortage, treated wastewater can be used for irrigation, industrial and landscaping purposes
- Helps protect the water from high Biochemical Oxygen Demand levels, which can affect aquatic life
TARIFF REVIEW NECESSARY
Malaysia has one of the lowest tariff rates in the world when it comes to wastewater treatments.
The monthly fee for a regular and low-cost household with connected systems are RM8 and RM2 respectively, as opposed to the actual servicing cost which amounts to RM18-RM20. It's quite a leap in price, especially when the work input is high; water oxygen level and sedimentation rate checks are all part of a daily routine for IWK's workers. Even one minor equipment breakdown can impact the overall quality of water, which is why they have to run thorough checks constantly, as well as manual cleanups.
While government subsidies are in place, the fact of the matter is that the tariffs have not been revised since IWK's inception more than two decades ago. Furthermore, as the government intends to recalibrate the subsidy expenditure, IWK finds ways to reduce dependency on the subsidy. This is worrying as it opens the floodgates to financial and environmental downfalls, because IWK is reliant on customer contributions and support. According to the Consumer Price Index (CPI) inflation rate as of 2017, RM8 is equivalent to RM14.38, showing how much maintenance and operation costs have grown.
During the Movement Control Order (MCO) period, all 8,146 IWK sewage treatment plants and network pumping stations remained in operation, with the public reporting a marked improvement in the river and environmental quality. In this regard, IWK shows an adherence to the strict standards imposed by the Department of Environment.
Electricity, mechanised plants, as well as aged machinery make up the majority of the company's operational costs, and it is estimated that there will be an increase in sewage treatment plants due to a growth in population. IWK also faces a big challenge in collecting payments from some of its users, mainly because they are not allowed to disconnect non-paying customers from their services.
All these point in the direction of one thing; in order for IWK to operate efficiently and effectively, a restructuring of the current tariff will be extremely beneficial, allowing for financial sustainability which is very helpful for the environment.
Since IWK's inception in 2000, the tariff has been unchanged, signalling that a review is long overdue. This will accommodate IWK's steep rise in operational costs, bearing in mind that IWK has been operating at a loss for each customer albeit with a collection rate of 90%.
Additionally, inflation is also another worrying factor, among many others, and operating costs are predicted to increase by 6.7% annually in the coming years.
While that is the case, the impact of the increment must not have such a blow to the lower income group.
Find out more about Indah Water Konsortium here.