Deputy prime minister Fadillah Yusof said although water falls under state jurisdiction, federal agencies such as the National Water Services Commission are actively coordinating with utility operators to ensure fair and efficient water usage.

“Before any increase in tariffs can even be implemented, utility companies must submit (their proposals) to SPARC and justify the increase,” Bernama reported him as saying today.

The energy transition and water transformation minister said the government is encouraging industrial users, including data centres, to switch to recycled water and develop sustainable district cooling systems.

“We want the state to set up zoning so that we can have district cooling systems for all heavy usage of water.

“This way, there will be no competition for clean water for human consumption,” he said.

Fadillah said a specific tariff for data centres is being formulated to protect domestic consumers from cross-subsidising large-scale users.

He aid the government’s long-term strategy is to balance economic growth with resource sustainability by promoting equitable access to water and encouraging industries to adopt more efficient and circular water technologies.

“This ensures our water system is managed effectively while also incentivising responsible usage across all sectors,” he said, adding that the move comes amid rising concerns over the high water usage by data centres and other high-tech infrastructure.