Air Selangor seeking hike in water tariffs for Klang Valley

Klang Valley water service operator Air Selangor has expressed hope that the government will review water tariffs as soon as possible.

Its acting chief executive officer Abas Abdullah told reporters that it is necessary for the water tariffs to be increased in stages to ensure there is an equilibrium between its annual revenue and expenditures.

He said Air Selangor recorded RM2.45 billion in total revenue last year versus over RM5.14 billion in its operational and capital expenditures.

While last year's revenue showed an increase of 12.38 percent compared to 2021 (RM2.18 billion), the company's total expenditure exceeded the amount of revenue.

"Despite an increase in revenue, total expenditure (operational and capital expenditures) exceeded total revenue, which indicates that further water tariff reviews are necessary for the company to achieve financial sustainability," he said during a press conference held at a posh cinema in Kuala Lumpur today.

For the conference, the company rented a 'comfort cabin' at the movie theatre complex, which normally costs around RM120 per seat for a movie screening. It also provided a buffet spread for the media covering the event.

Air Selangor caters to over nine million consumers in Selangor, Kuala Lumpur and Putrajaya.

It charges domestic customers a rate of 57 sen per cubic meter for the first 20m³; RM1.03 for the next 15m³, and RM2 for usage above 35m³.

Air Selangor had last year raised an average of 20 sen per cubic meter for the non-domestic customers category, which includes industry and businesses.

Abas told reporters that the last time the company had increased its water tariffs was in 2006.

Investing in new tech

Abas explained it is important for Air Selangor to increase its water tariffs so the company can continue to spend on capital investments to ensure smooth operations for consumers.

If the tariffs are not increased, he said, the company would only be able to cover its operational costs and hamper Air Selangor's ability to replace its ageing assets and invest in new technology to prevent non-revenue water (NRW) losses, among others.

"Further delay in tariff adjustment will cause challenges for us to achieve full-cost recovery and hamper Air Selangor's ability to continue upgrading its ageing water infrastructure, which will ultimately impact our service levels in the long run.

"A sustainable business model is extremely crucial to enable us to develop the necessary water infrastructure to meet growing water demand, to ensure timely upgrades of ageing assets, and to ensure operational efficiency, and ultimately provide the best experience to our customers," he said.

Keeping it ‘affordable’

When queried on the new tariff rates that Air Selangor seeks, its head of finance and strategy Kevin Lee only said that it will still be within an "affordable" range for consumers.

However, it has no plans to increase the tariff for the first 20 cubic meters for domestic customers, he added.

Air Selangor is also looking for the hike to be introduced gradually every three years.

Meanwhile, Abas told reporters the company aims to plug losses in NRW in the future through several initiatives.

In 2022, the company managed to reduce the average NRW to 27.76 percent compared to 27.99 percent the previous year.

The new initiatives include introducing a mobile application that will empower consumers into helping Air Selangor identify and report water leakages, and using a water meter with better technology that can detect leaks and is more accurate.

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