SYARIKAT BEKALAN AIR SELANGOR SDN BHD SYABAS

1
Managing Challenges Towards Sustainable Water
Resources Environment
Balancing Consumers Concerns With Producers
Capacity Ir. V. Subramaniam Executive Director
Operations SYABAS Grand BlueWave Hotel, Shah
Alam 26 - 27 March 2007
2
INTRODUCTION

• Syarikat Bekalan Air Selangor Sdn Bhd ( SYABAS )
  officially commenced operation on 1 Jan 2005
• SYABAS supplies water to State of Selangor and
  the Federal Territories of Kuala Lumpur and
  Putrajaya
• Total number of consumers 7.1 million
• SYABAS supplies continuous water supply (24x7) to
  all domestic, industrial and commercial consumers
• The coverage of water supply in urban areas is
  100 and 95 in non-urban areas
• Concession Period 30 years (1 Jan 2005 to 31 Dec
  2034)

3
INTRODUCTION (cont.)

• Rights and Responsibilities
• - Supply treated water to consumers
• - Purchase treated water from Water Treatment
  Plant
• Operators
• - Take over, upgrade, operate, maintain and
  safeguard all
• existing water supply infrastructure
• - Design and construct additional water supply
  infrastructure to meet the increasing water
  demand
• - The right to bill and collect gazetted water
  tariff charges for
• the supply and distribution of treated
  water to consumers
• - The right to collect other gazetted charges

4
SYABAS OPERATING REGIME AFTER PRIVATISATION
Federal Government
State Government
WTP Operator
Privatisation Concession Agreement
Jabatan Kawalselia Air Selangor
PNSB
Partial Novation Agreement to SYABAS
SYABAS
PNHB 70 KDEB 30 FEDERAL GOVT 1
Golden Share
SPLASH
Pengarah Kawalselia
ABASS
Existing staff
Services Operation
100
PUAS
Consumers in Selangor, KL Putrajaya
5
ASSETS
6
WATER TREATMENT PLANTS (OPERATED BY THREE
INDEPENDENT OPERATORS)
7
STORAGE DAMS (OPERATED BY INDEPENDENT WATER
OPERATORS)
8
DAMS
9
DAMS
SG BATU DAM
10
DAMS
11
DAMS
12
DAMS
13
RESPONSIBILITY OF CONCESSION COMPANIES (WTPs)
TREATED WATER CHANNELLED TO BALANCING RESERVOIR
RAW WATER CHANNELLED TO INTAKE
DAM TO ENSURE SUFFICIENT RAW WATER AT ALL TIMES
TREATMENT PLANT FLOCCULATION, COAGULATION
CHEMICAL DOSING TO PRODUCE TREATED WATER
BALANCING RESERVOIR WATER STORED BEFORE
DISTRIBUTION
RESPONSIBILITY OF SYABAS
WATER DISTRIBUTED AT SPECIFIED PRESSURE
WATER DISTRIBUTED TO CONSUMERS
SERVICE RESERVOIR WATER STORED BEFORE DISTRIBUTION
PUMP HOUSE BOOST PRESSURE BEFORE DISTRBUTION
14
PROJECTED WATER DEMAND2007 - 2034
Water deficit
Average demand growth 3.6
15
SYABAS RESPONSIBILITIES AND COMMITMENT

• Mandatory Service Levels
• For the first time in Malaysia, in the privatised
  water supply services, the concept of imposing
  penalties and fines is introduced.
• The SYABAS Privatisation Agreement will be a
  benchmark for future privatisation projects.
• SYABAS is required to ensure water supply
  services with regards to quality and quantity
  according to service levels as stipulated in the
  concession agreement, failing which a penalty
  will be imposed.

16
SYABAS CLIENT CHARTER

• SYABAS must strictly observe the Client Charter
  of the concession agreement covering
• Counter service
• Response time to application
• Recovery period of interruption
• Billing schedule
• Notices and sending relief water to consumers
  during supply interruptions
• Response time to complaints
• Others

17
CONSUMERS CONCERNS
Three(3) main concerns
Efficiency of Service
Effective Water Tariff Strategy
Water Quality / Pollution
18
THE NEED FOR EFFECTIVE WATER TARIFF STRATEGY
Consumers Concerns contd

• Revenue cannot recover operating cost

• 41 of the state water authorities has operating
  deficit
• The country as a whole, only 87 of the operating
  cost is recovered through revenue
• CAPEX has not been taken into account

19
CAPEX not Factored into Cost of Supplying Water
Consumers Concerns Water Tariff contd

• True cost of supplying water not known (CAPEX
  OPEX)
• - Subsidy from Government through soft loan
  and
• grant
• - Cash accounting system used
• Level of subsidy not known as true cost not known
• Price of water fixed arbitrarily
• Excessive subsidy breeds inefficiency and wastage

20
CAPEX Cost will increase
Consumers Concerns Water Tariff contd

• Water demand will increase from 11,806 MLD in
  2005
• to 16,271 MLD in 2010, hence require more
  CAPEX
• to develop the water supply infrastructure
• Future CAPEX involve higher cost due to
• - Water resources further away from demand
  areas
• - To use poorer water quality with more
  sophisticated treatment technology and higher
  operating costs
• - Higher expected level of service
• For proper water pricing, the need to know the
  future investment level.

21

Consumers Concerns Water Tariff contd
Low income group are subsidized through tariff
band structure
For example in Selangor, Kuala Lumpur and
Putrajaya
This should continue to make basic water supply
available to low income group.
22
Consumers Concerns Water Tariff contd

• Commercial/industrial consumers pay higher
  average water tariff
• - Average domestic rate for the country
  RM0.72/m³
• - Average commercial/industrial for the
  country RM2.28/m³
• Average Commercial/Industrial Rate 3.0
  times
• Average Domestic Rate
• This should continue because
• - Commercial/industrial has higher
  affordability to pay
• - To encourage recycling and reuse

23
Recommendations
Consumers Concerns Water Tariff contd

• Cost of supplying water should take into account
  both OPEX, CAPEX costs i.e. the true cost.
• As a long-term goal, tariff should attain full
  cost recovery to ensure sustainability and
  efficient use of resources.
• Tariff should be regularly reviewed.
• Tariff should consider expected level of service
  and affordability to pay.
• To continue with the subsidized Lifeline
  Consumption Band for domestic rate.
• To continue with the higher commercial/industrial
  rate over domestic rate

24
WATER QUALITY POLLUTION
Consumers Concerns contd

• Water resources are polluted

120 rivers basins, only 48 are categorized as
clean, suitable for raw water abstraction.
25
Consumers Concerns Water Quality Pollution
contd

• Raw water has its value in the value chain

• Quality Poor raw water quality leads to higher
  cost of treatment. To maintain good raw water
  quality will incur opportunity cost such as
  control of development, and direct cost of
  enforcement and protection.
• Location Water obtained from long distances
  require higher transfer cost (both CAPEX and
  energy cost)
• Availability Water obtained through
  construction of dam required higher CAPEX cost
  than abstracted directly from river.

• There is a need
• - To attach a value to raw water
• To attach different values to varying raw water
  quality standards
• Water Price should include raw water price

26
Need for Effective Water Resources Management
Consumers Concerns Water Quality Pollution
contd

• Lack of fund and resources
• Yet to implement Integrated Water Resources
  Management
• Revenue from raw water to be used for water
  resources management to ensure sustainability

27
Demand Management
Consumers Concerns Water Quality Pollution
contd

• Demand management not effectively implemented yet
• Revenue collected from raw water can be used to
  facilitate demand management which in turn can
  reduce the demand on the limited raw water
  resources

28
Recommendations
Consumers Concerns Water Quality Pollution
contd

• To attach a value to raw water, different values
  for varying raw water quality standards.
• Water price to include raw water cost.
• Revenue collected from raw water to be used for
• - water resources management
• - demand management

29
Consumers Concerns contd
EFFICIENCY OF SERVICE

• High Non-Revenue Water (NRW) at 42.78 in the
  beginning of 2005.
• Syabas managed to reduce to 37.28 in 2006.
• Current NRW at 34-35.
• Target to achieve NRW of 15 by the year 2015.

30
Lack of Fund For Investment
Consumers Concerns Efficiency of Service contd

• Lack of fund to undertake appropriate works
  programme to achieve efficiency and level of
  service i.e pipe replacement programme
• Proper water pricing will generate sufficient
  fund for proper investment and improve efficiency
• Federal Government established WAMCO recently to
  facilitate funding, but proper pricing is still
  necessary to recover the funding

31
SCHEMETIC LAYOUT OF A WATER SUPPLY SYSTEM (
Overall Water Quality Management Framework )
RAW WATER
INTERNAL PLUMBING STORAGE TANKS
TREATED WATER PRODUCTION TRANSMISSION
DISTRIBUTION SERVICE RESERVOIRS
Trunk Distribution Mains
River
River
Bulk Meter
Parties Responsible
State Govt

• Water Treatment Operators
• PNSB
• ABASS
• SPLASH
• KPSB
• Monitoring
• JKAS - monitoring
• MOH - sampling

• SYABAS
• a) Routine maintenance and cleaning of
  reservoirs
• and pipeline
• b) In-house water quality sampling and
  monitoring
• JKAS - monitoring
• MOH - sampling

• Consumers
• Replacement of old internal plumbing system and
  storage tanks and communication pipes.
• Clearing of storage tanks
• No modification of internal plumbing without
  approval.

SYABAS Role
Authority Involved In Water Quality
DOE LUAS
Note JKAS - Jabatan Kawalselia Air
Selangor MOH - Ministry of Health Malaysia
32
UPGRADING OF CUSTOMER SERVICE - PUSPEL

• SYABAS has established a Customer Service Centre
  called PUSPEL which consist of three (3) major
  components
• 1. Call Centre
• 2. Industrical Consumer Unit (ICU)
• 3. Residential Consumer Unit (YAKIN)

33
PUSPEL Call Centre

• Characteristic of Consumer Call Centre
• Daily 24 hours operation
• 60 Tol-free line.
• Usage of Up-to-date Information System.
• On-line transmission from SYABAS HQ to all
  district offices
• Method to contact PUSPEL
• Tol-fee 1-800-88-5252
• Use of SMS ( 39222 )
• e-mail puspel_at_syabas.com.my
• Fax [phone]
• Walk-in

34
CALL CENTRE FLOWCHART
1
DISTRICT OFFICES
2
Recording of Consumers complaint
Problem forwarded to district office
Site
3
PUSPEL
House
Case and time-frame identified
On-line / Fax
5
Corporate
Telephone, Fax, SMS e-mail
4
Tol free 1-800-88-5252
1st feedback with information on the problem and
time frame needed for rectification
Industrial
Consumer
6
9
24 hours x 7 days Operation
8
Contact consumer to give information and a thank
you letter.
7
Repair Works
2nd feedback on status on the repair works
Feedback Status
35
PUSPEL - Industrial Consumer Unit (ICU)

• Was set-up to give special attention to
  Industrial Consumers.
• There are about 210,000 consumers categories as
  Commercial and Industrial Consumers.

36
PUSPEL - Industrial Consumer Unit Flowchart (ICU)
37
PUSPEL Residential Consumer Unit ( YAKIN )

• YAKIN was set-up as a problem solving centre for
  all local district consumers.
• YAKIN receive, manage and solve all the
  requirement and complaints on water supply.
• It was also set-up for tighten the rapport
  between local consumer and SYABAS so as all the
  problems pertaining to water supply can be solved
  together
• Members of the YAKIN Unit are
• Members of State Executive Council
• Members of Parliament
• Residents Associations
• Village Heads

38
PUSPEL Residential Consumer Unit Flowchart
(YAKIN)
39
Recommendations
Consumers Concerns Efficiency of Service contd

• Proper pricing level to enable sufficient funding
  for appropriate investment to promote efficiency.
• A structured water pricing structure will promote
  private investment and pursuit for higher
  efficiency and level of service

40
CONCLUSION

• Effective water pricing will result in financial
  sustainability of the water supply sector,
  promote environmental sustainability, and a
  viable business sector resulting in higher
  efficiency and enhanced level of consumer
  services.
• This will also alleviate consumers concerns
  regarding the aspects of water tariff,
  eliminating wastages, quality of treated water
  and level of services.
• Need to conserve water and preserve water
  resources.

41

• Thank You