Companies eyeing national sewerage company Indah Water Consortium (IWK) must be prepared to invest a huge sum of money and not rely on government support, said Prime Minister Dr Mahathir Mohamad yesterday.

The premier said the cost to manage the sewerage company is very high, estimated at between RM8 billion and RM10 billion over several years.

Mahathir was speaking to reporters after opening the International Water Association Conference on Water and Wastewater for Developing Countries at the Putra World Trade Centre in Kuala Lumpur yesterday.

Mahathir said several companies are interested to resume management of the formerly privatised sewerage company which has been taken over by the government to be restructured.

"But, our condition is they must invest and cannot depend on the government to support them," he stressed, without naming the interested parties.

One of the hopefuls is believed to be a company linked to former deputy home minister Megat Junid Megat Ayub.

However, Mahathir stressed that the government will carefully evaluate the interested companies.

He said the government will not allow the recurrence of the incident where a company to which sewerage services were privatised, did not maintain the water treatment plants but was instead "busy selling shares [of the company]".

"The price of the company goes up but nothing is done on the ground," Mahathir said.

Development lagging

Ever since the government awarded IWK - linked to business tycoon Vincent Tan - with the privatisation project, the company had been hogged by a slew of controversies.

The privatisation of the national sewerage services involving up to RM6.25 billion then was done without prior public notice, thus giving rise to allegations of backroom deals and cronyism.

The government was eventually forced to renegotiate the price for the facilities.

Nevertheless, the problem did not end there as many consumers refused to pay IWK for the higher charges imposed for its services.

Various parties including the government, however, argued that privatisation of the sewerage services was necessary because the cost of developing a modern and efficient sewerage system was too expensive to be borne by the government.

In comparison with the development of water infrastructure, the investment into the development of the sewerage system was clearly lagging.

From the third to sixth Malaysia plans, the government spent RM7.8 billion in development of water infrastructure but only RM328 million for the sewerage system.

Untreated sewage

According to a report conducted by Canadian environmental organisation Environment Probe, which supported the necessity of privatising sewerage services, the country's sewer system was reaching only 25 per cent of the population by 1992.

The report also stated that out of the 1.2 million septic tanks, only 12,000 had their sludge removed.

Of the sewage that entered the system, 65 per cent was dumped untreated into rivers and oceans. Thus, up to 65 per cent of the rivers in the country were deemed polluted; 7 percent, extremely polluted.