The government strongly encourages utility companies to undertake comprehensive asset management as any crisis to utilities would shake the confidence and security of the country.
Minister of Energy, Green Technology and Water, Datuk Seri Peter Chin Fah Kui said the government and industry players must ensure, that the infrastructure at present is well maintained.
"The infrastructure system for the three mains utilities is humongous and the effort which goes into its construction and maintenance is equally daunting," he added.
The total installed capacity of electricity is more than 20,000 MW in Malaysia.
For water services, there are more than 6.2 million connections and total consumption exceeds 8,550 million litres daily (MLD).
There are also 5,600 public sewerage treatment systems and another 2,000 under private care.
Chin said this in his keynote address titled, National Utility Asset Management: Towards A Better Government For Improved Level of Services, at the 1st World Congress and Exhibition on Infrastructure Asset Management here today.
"The water sector though is more complicated. The issue now is about building up the infrastructure," Chin added.
He pointed out that the investment requirement of the water supply sector for the period 2000-2050 was approximately RM52 billion, according to the National Water Resources Study 2000-2050.
As for the sewerage sector, the National Sewerage Development Plan projected that a capex of at least RM33 billion is needed over the next 30 years for upgrading and building new systems, he said.
"Since the water industry is not on full cost recovery, thus public spending is needed to finance capex. The shortage of public funding has indeed crippled the viability of the industry.
"As a result, the government has established a special purpose vehicle, Pengurusan Aset Air Bhd (PAAB), to reduce the capex burden of the services companies, with the assets of the water services companies being transferred to it," he explained.
PAAB is currently registering all the assets,including those in the three migrated states of Negeri Sembilan, Melaka and Johor.
Chin said the PAAB, which able to source and obtain competitive financing, has estimated that over RM24 billion would be required for the next 30 years, for asset build-up and maintenance.
Nevertheless, the minister said public funds would continue to be spent on utility assets, for example the US$483.9 million Pahang-Selangor Water Transfer Scheme.
Meanwhile, Chin urged the water operators and National Water Services Commission (SPAN) to check treatment plants that are continuously producing water, exceeding their design capacities.
He said these plants could not be stopped for scheduled maintenance due to the high demand but the overloading will definitely reduce its life cycle.
On the non-revenue water (NRW), which stands at 37 percent, Chin said SPAN has set NRW reduction for water companies as one of the main key performance indicators (KPI) to be fulfilled under their licensing requirement.
The NRW is mainly due to ageing pipes which require rehabilitation and replacement.
The minister noted that in Negeri Sembilan, the NRW had been reduced to 43.4 per cent in 2010 from 49.2 per cent the previous year, in Melaka to 26 per cent from 29.7 per cent and in Johor to 29.9 per cent from 31.9 per cent.
He also highlighted that maintaining national utility assets is a major issue facing not only Malaysia, but all developing nations.- BERNAMA
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