Friday June 27, 2008 MYT 6:17:15 PM

Syabas to seek 40% increase in water tariffs next year

By DHARMENDER SINGH

SHAH ALAM: Syarikat SHAH ALAM: Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) will be forced to seek a 30 to 40% increase in water tariffs for next year because the state's water producers are feeling the pinch due to rising costs.

Puncak Niaga Sdn Bhd (which partly owns Syabas) executive chairman Tan Sri Rozali Ismail said the price hike of chemicals and other materials, and the potential rise in electricity tariffs weren't helping much.

He said the recent increase in prices of household goods also meant that the companies involved would have to raise salaries, which would add to the rising costs.

“The increase is too high for the water producers or Puncak Niaga to absorb,'' said Rozali. “And, we will have to pass back some of it to the consumers,'' he told reporters after the Selangor, Kuala Lumpur and Putrajaya Water Association’s annual general meeting.

Deputy Energy, Water and Communications Minister Datuk Joseph Salang Gandum launched the event.

Rozali said Puncak Niaga had invested over RM4bil through loans to improve water production and distribution in the state. He said it should not be expected to absorb further costs.

“We spent a huge sum to repair and upgrade facilities as well as undertake the massive task of changing some 6,000km of aged asbestos pipes that were the cause of frequent supply disruptions,'' he said.

According to its concession agreement Syabas can seek an increase in tariffs early next year. It last did so in 2006.

The water concessionaire can however only increase its tariffs after getting the approval from the Energy, Water and Communications Ministry.

Puncak Niaga Sdn Bhd (which partly owns Syabas) executive chairman Tan Sri Rozali Ismail said the price hike of chemicals and other materials, and the potential rise in electricity tariffs weren't helping much.

He said the recent increase in prices of household goods also meant that the companies involved would have to raise salaries, which would add to the rising costs.

“The increase is too high for the water producers or Puncak Niaga to absorb,'' said Rozali. “And, we will have to pass back some of it to the consumers,'' he told reporters after the Selangor, Kuala Lumpur and Putrajaya Water Association’s annual general meeting.

Deputy Energy, Water and Communications Minister Datuk Joseph Salang Gandum launched the event.

Rozali said Puncak Niaga had invested over RM4bil through loans to improve water production and distribution in the state. He said it should not be expected to absorb further costs.

“We spent a huge sum to repair and upgrade facilities as well as undertake the massive task of changing some 6,000km of aged asbestos pipes that were the cause of frequent supply disruptions,'' he said.

According to its concession agreement Syabas can seek an increase in tariffs early next year. It last did so in 2006.

The water concessionaire can however only increase its tariffs after getting the approval from the Energy, Water and Communications Ministry.