There is no guarantee that water tariff will not go up when the management of water supply is taken over by the federal government from state governments, said Prime Minister Abdullah Ahmad Badawi today.

"We can't assure there would not be water tariff hike forever," he told a press conference in Parliament after the Constitution Amendment Bill 2004 was passed.

The premier said the water tariff will be determined by the new National Water Services Commission (Span).

Previously, the government had stated it would not raise the water tariff for at least two years.

On the request by the PAS-led Kelantan government to be exempted from the takeover, Abdullah said the state government had since agreed to the constitutional amendment.

The bill was passed by the Dewan Rakyat at 7.10pm for a third reading through block-voting. A total of 189 parliamentarians were in favour while 17 opposed.

The bill will be debated at the Senate tomorrow and is expected to be adopted.

Assessment process

In his winding up on the debate earlier, Energy, Water and Communications Minister Dr Lim Keng Yaik said it is "quite difficult" to issue an assurance on the tariff.

He explained that under the new structure, the government - via his ministry - will ensure there would not be an automatic hike.

Any increase, he added, would be done through an 'open and meticulous' assessment process, which will also take into account the views of the operator, consumer and government.

Apart from this, he said the government will also ensure that any application for tariff review will be in line with the variable capital expenditure, operational expenditure and fulfill the standard performance from the rate of non-revenue water and distribution cost.

He said the majority of the current concessionaires agreement provides automatic tariff hike or bulk supply rate, and compensation to the water operator if the tariff hike is not agreed to by the government.

This, he added, is the main reason behind the debts, amounting to billions of ringgit, incurred by the state governments.

On Sunday, the minister told reporters after a briefing with parliamentarians that the government will not raise the water tariff for at least two years. He said any change to the existing tariff would only be decided after the two-year moratorium.

However, he did not give any such assurance this evening nor mentioned anything pertaining to the two-year moratorium in his winding-up speech.

Barisan Nasional (BN) backbenchers yesterday voiced concern over the possibility of an immediate increase in water tariff.

Water treatment

Meanwhile, Lim said the misconception that the amendment violated the basic human right for access to water has to be corrected.

"There are many quarters, including a few parliamentarians, who said that water is free because it comes from the sky. So, why should we pay for it at a high tariff.

"I would like to emphasise that the tariff is not paid for the water but the service cost, meaning the water treatment," he added.

On the state governments' RM7.5 billion debt, Lim is confident that the amount could be settled through the public-private partnership as proposed in the amendment.

He also said that professionals will be appointed as members of the new Span commission.

The minister reiterated that the transfer of water management is vital as the current system is not standardised and is 'weak and inefficient'.