WATER SUPPLY AND SANITATION IN MALAYSIA..

Water supply and sanitation in Malaysia is characterized by numerous achievements, as well as some challenges. Universal access to water supply at affordable tariffs is a substantial achievement. The government has also shown a commitment to make the sector more efficient, to create a sustainable funding mechanism and to improve the customer orientation of service providers through sector reforms enacted in 2006. The reform creates a modern institutional structure for the water sector, including an autonomous regulatory agency, an asset holding company and commercialized state water companies that have to reach certain key performance indicators that will be monitored by the regulatory agency. The government has also stated its intention not to embark on new private sector contracts for water provision, after a bout of such contracts during the 1990s showed mixed results.
A number of challenges remain, only some of which have been addressed by the reforms. First, tariffs are low, thus making cost recovery impossible at current levels so that the sector continues to depend on government subsidies. Second, water losses as well as per capita water use remain high despite efforts at water demand management. Third, a large-scale water transfer project from the Pahang River to Kuala Lumpur is controversial because of its negative social and environmental impacts. Fourth, the development of sewerage and wastewater treatment has lagged behind the development of water infrastructure. For example, much of the collected wastewater is not yet being treated. The sanitation sub-sector has been excluded in the 2006 reforms of the water supply sub-sector.