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CAP against IWK’s plan to change its tariff system

Recently, the Consumers Association of Penang (CAP) attended a meeting with Indah Water Consortium (IWK) and the National Water Service Commission (Span), where IWK announced its plans to change the current tariff system from the standard monthly rate to a system based on water consumption instead, which will incidentally increase the IWK bills for many consumers. They plan to implement this change sometime in January 2015.

According to IWK, they need to do this because their cost of operations have gone up considerably due to the rise in costs of hiring manpower and also the continual increase in our population size. Increase in population size means IWK needs to hire more people to manage more sewerage systems, manage more waste plants, more experts on waste treatment and in general more people to run the operation.  

They also claim that they have minimal revenue, which no one can really confirm for sure until they scrutinise IWK’s audited accounts reports. Added on to that is also the fact that many people still do not pay their IWK bills.

Nevertheless, is changing the tariff system really the right thing to do? We feel that there are many important factors that could be detrimental to consumers that have not been taken into consideration by IWK. The factors include:

1. Many consumers do not pay their IWK bills, but what about the ones who do? It is not fair to them that IWK wants to increase the tariff because other people do not pay. Why punish the responsible bill payers?

2. There are already some changes being implemented early next year such as the goods and services tax (GST) in April and people are still not sure how this will impact them in practice.

3. The cost of living in our country is steadily increasing but the average income is not. Minimum wage is set at only RM900 a month; however people nowadays have a multitude of bills to pay, food expenses to consider and money for emergency situations that they can hopefully put aside. How are those in the low income category suppose to survive?

4. When the cost of one service goes up, the cost of many unrelated things also go up. If the IWK tariff goes up, the price of a cup of tea is also likely to increase, because businesses work that increase in cost into the price of their products.

In light of this, CAP is against the increase in tariff. Instead of putting the blame for IWK’s lack of revenue on the consumers, they should find a way to responsibly increase their revenue without disadvantaging consumers.

IWK needs to be transparent

There are some things that are not clear to us that should be before we can accept an increase in IWK’s tariff.  For instance, are the funds IWK have really not enough; and if so then why? Are the funds beings used efficiently and responsibly? Is the bulk of IWK’s revenue being channelled to managerial costs?

IWK needs to be transparent; how can people just accept that IWK’s revenue is low without knowing why, especially when it’s the consumer’s wallet that will be lightened?

Also, is IWK using the manpower it has efficiently or are more people than necessary being used for a simple job? Do they really need to hire more workers?

Furthermore, we ask, what is IWK doing to ensure that people do pay their bills? IWK has established that there are still many people not paying their bills and even if they do pay they might not do it regularly. That itself seems to be the reason for IWK’s lack of revenue, so shouldn’t they be finding a way to make people settle their bills instead of increasing the tariff on a bill that people do not pay?

Without changing the current tariff system and increasing the tariff, what other actions can IWK take, that will not be detrimental to consumers, to ensure an increase in revenue for IWK and that consumers pay their IWK bills?

CAP objects to any increase in tariff until full justification has been provided through IWK disclosing their audited account reports and there is more engagement of public consultation and proper and thorough analysis of the impact of an increase on consumers is done. Such a simple-minded solution of increasing the tariff is not acceptable.

Instead they should cut fund wastage and manpower inefficiencies where it is apparent, collect all outstanding payments owed to them and make it so that people have no choice but to pay their IWK bills.

We also ask that consumers pay their IWK bills. Proper sewerage management is very important for a society to run smoothly and that is what IWK provides. Without IWK there would be methane gas explosions, diseases and illnesses due to contamination by human faeces and the general disgustingness of human dung not being managed. You never realise how vital something is until there is a problem.


SM MOHAMED IDRIS is president, Consumers Association of Penang.

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