The Penang Water Authority (PBAPP) has recorded a lower profit (after tax) of RM24.76 million last year as compared to RM27.93 million in 2013.

In making the announcement, Chief Minister Lim Guan Eng said these has taken into account other variances in administrative expenses, interest income, share of profits and income tax expense.

“Please note that while we focussed in cost efficiency in the face of increasing costs, the nature of our business does not allow us to arbitrarily increase product pricing (water tariffs) without state and federal approval,” said Lim, in a press conference after attending the 12th annual general meeting of PBA Holdings Bhd.

Accompanying him were Deputy Chief Ministers (I) Rashid Hasnon and (II) P Ramasamy, and PBA chief executive Jaseni Maidinsa.

PBA Holdings reported higher revenue

Lim, who is the company’s chairman said PBA Holdings Bhd reported revenue amounting to RM261.02 in 2014 as compared to RM251.73 million in 2013.

This represented a 3.69 percent increase year on year, he said.

“The company’s cost of sales which included cost of electricity, petrol, chemical and maintenance cost increased by 6.62 percent during the year in review, from RM183.46 million in 2013 to RM195.60 million in 2014.

Nevertheless, PBAPP submitted its proposal to the National Water Services Commission to review water tariff rates on Jul 30, last year.

Putrajaya approved and gazetted the water tariff review on Feb 15 this year, and it was implemented in Penang on April 1.

Lim ( photo ) said PBAPP implemented the water tariff review to manage water demand more effectively and promote water conservation in Penang.

“The main rationales for the review are to address the challenges of water sufficiently in the time of climate change, and to avoid water rationing in Penang at all cost,” said the DAP secretary-general.

“But the water tariff review should help to sustain PBAPP’s business in the long run as PBAPP needs to ensure sufficient water to sell and generate continuously, 24 hours a day, everyday, in Penang,” added the Bagan MP.

Refused to speculate

However, Lim refused to speculate on the financial outcome of the water tariff review.

He said consumer response to the hike in water tariff cannot be predicted as it was meant to lower the high per capita domestic consumption in Penang.

“That is why we do not want to speculate on the financial impact of the water tariff review,” said Lim, who is also Air Putih assemblyman.

Lim said water consumption is subject to various socio-economic and cultural factors, including the federal government’s implementation of the six percent Goods and Services Tax across Malaysia since April 1.

Meanwhile, Lim declared that the dividend for PBA Holdings Bhd shareholders was 7.5 percent for the 2014 financial year.

He said the company’s AGM approved a final single tier dividend of four percent. As at April 7, the company has 8,884 shareholders.