The former deputy investment, trade and industry minister proposed the establishment of a fair and transparent system for capital expenses (capex) spending on new developments as part of the restructuring effort.
He said there is currently a “disadvantage” for first movers, where private developers of new property projects are required to bear upfront costs for connecting new pipes to the existing water infrastructure.
“I think the state water authorities should come up with a better capex pricing model whereby private developers will be charged development and connection costs, whereas the capex is borne by the water authorities,” the former Bangi MP said in a statement.
“This would be an improvement to the current integrated water supply scheme currently practised in the Klang Valley.”
Capex is one of the few cost components being factored into the tariff. It involves replacing old pipes, building new water treatment plants, and upgrading existing ones.
Last Thursday, the National Water Services Commission (SPAN) announced that an adjustment of water tariffs for domestic users in the peninsula and Labuan would be implemented from Feb 1, involving an average increase of 22 sen per cubic metre.
SPAN said through the tariff setting mechanism, the structure for tariffs would be standardised across states in the peninsula and Labuan, while tariff rates would be reviewed every three years.
In his statement, Ong also recommended seeking new sources of financing from foreign investors and international funding organisations to boost water processing capacity, particularly for poorer states like Sabah and Kelantan.
“Access new sources of financing from foreign investors and international funding organisations such as the Asian Development Bank, the European Invest Bank, the Asian Infrastructure Investment Bank, the World Bank,” he said.
Ong, who is Selangor DAP treasurer, further proposed collaboration with government-linked companies (GLCs) based in Singapore as potential contributors to funding efforts.
His other suggestions include giving state water authorities incentives to reduce non-revenue water and exploring new sources of water supply.
Previously, SPAN chairman Charles Santiago defended the upcoming water tariff hike, calling it a necessary measure to improve water facilities in West Malaysia and Labuan.
Santiago said while tariff increases may have financial implications for some people, it was a necessary investment for the future.