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Water Dept revamp to save RM1b
Published on: Tuesday, August 28, 2018

Kota Kinabalu: The State Government is expected to save up to nearly RM1 billion spent on providing clean water supply in Sabah, when the current restructuring exercise involving the Sabah Water Department is completed.

The exercise, which started about a week ago and would take six months to complete, also involves a review on the outsourcing contracts of the six water concessionaires managing 58 out of the total 83 water treatment plants throughout Sabah.

State Infrastructure Development Minister Datuk Peter Anthony (pic) said the complete overhaul of the said department started with the appointment of Amarjit Singh as its new Director.

Anthony said his vast experience and expertise would improve the department, besides helping to save money for the State Government and the people of Sabah.

"Under the exercise, we are introducing new management approaches apart from doing complete improvements, from engineers at the district-level and up to the administration level," he said.

Anthony said as part of the exercise, the Ministry would also review the outsourcing contracts of the six water concessioners operating 58 water treatment plants in the State.

"These six water concessionaires have been the subject of controversy.


"It has been a subject of controversy since the beginning, how the previous State Government appointed and has allowed these concessioners to operate without no needing to come up with any modal capital," he said.

He said the Ministry, according to the latest contract record, are forced to pay an accumulated total of RM37billion to the six water concessioners for 20 years' contract.

"It is about RM186million a year, for all six concessionaires, for the operations of all 58 water treatment plants...this is the total amount paid by the State Government to them," he said.

"It is good for the people of Sabah, it is fair...I am making sure that do a review on it so this waste will stop and in the next six month there will be positive changes that will be benefitted by the people," he said.

Anthony believed the restructuring exercise currently undertaken by the Water Department would be able to bring the rate further down and deliver more profits to the State Government.

When asked, Anthony said the Ministry is currently still looking at the contracts of the six concessionaires and their 58 water treatment plants.


He said there had been weaknesses on the part of the previous State Government that resulted in "lopsided" agreements sealed with the six concessionaires.

"Like for example, in the contract it stated that the six water concessionaires will not pay for the cost of maintenance of any of the equipment at the water treatment plants if it is over RM5,000 limit, as it will the State Government to pay for it.

"But we all know that most equipment at our treatment plants are 20 years old, which would cost over RM5,000 if broken down or need to be replaced...so the concessioners would almost never pay for the maintenance or replacing of the equipment at the water treatment plant, they just surrender it to the State Government to pay for it," he said.

Even when the concessioners are paid billions of ringgit, he said, the State Government still have to shoulder the payments of those equipment at the water treatment plants that costs over RM5,000 which are unfair to the government.

"We have ideas on how to deal with this "lopsided" contract," he said, adding just by improving on this particular matter the State Government can expect to save almost RM1billion over the period of 20 years.

Anthony said he will also ask the Malaysia Anti Corruption Commission (MACC) to re-open the case file on the said water concessioners.


"Non-revenue water (NRW), which is currently very high in the State, will be the main focus for the department under the leadership of the new director," he said, adding the Ministry hopes great positive changes will happen in the department within the next six months to one year. - Larry Ralon

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