THE JOURNEY: EVOLUTION OF WATER AND SANITATION SECTOR MANAGEMENT IN MALAYSIA

WHERE IS MALAYSIA TODAY? Country and areas Year UrbanRuralUrbanRural Malaysia Water Sanitation South East Asia Water Sanitation Developed regions Water Sanitation

YEAR TECHNOLOGY 1950-s1970-s 1980-s1990-s2000 Primitive / Primary Treatment Partial / Full Secondary Treatment 1960-s Pour Flush Septic Tank Imhoff Tank OP/AL Activated Sludge/ Biological Filters FullyMechanised Plant (Address Public Health) (Address River Pollution) (Address Environment) Future Tertiary Treatment Prior to 1950-s Early Days in Malaya EVOLUTION OF SANITATION IN MALAYSIA - INDIVIDUAL vs COMMUNITY DIRECT BENEFIT TO USER COMMUNITY/ENVIRONMENT

REGULATORY EVOLUTION Before Independence CurrentMostly Managed by local Sanitary Board Urban by Municipals, Rural by Ministry of Health A new act passed & Sewerage Services Department (JPP) was formed as regulator agency. Indah water took over sewerage management in most states Water services regulated and managed by states WSIA / SPAN Acts was enacted. SPAN new regulatory agency. Water services regulated by states and managed by state or private bodies or corporatized bodies Water services regulated by Federal agency (SPAN). One regulatory agency for both water & sewerage. All water and sewerage operators must migrate to licensing regime to enjoy financial benefits Transition of power from Local Government to Federal Government Transition of power from State Government to Federal Government -Compliance Regulatory Water Accounting -Benchmarking of performances - services and financials -Joint billing -Integrations of water and sewerage services -Establishing policies in relation to water cycle and SDGs -Strategies and planning base on water safety and security -Sewerage catchment strategies base on public health, protection of water resources and environment and economic feasibility

DESLUDGING TREND Total AttemptedTotal UnsuccessfulTotal Desludged LIBERALISATION CONCEPT

DAM RIVER WATER TREATMENT PLANT BALANCING RESERVOIR SERVICE RESERVOIR TRUNK MAIN DISTRIBUTION MAIN CONSUMER SEPTIC TANK SEWAGE TREATMENT PLANT RIVER WATER SUPPLY SYSTEMWASTEWATER SYSTEM SOURCE State Government Dept of Environment Drainage & Irrigation Dept TREATMENT & DISTRIBUTION TREATMENT CATCHMENT AREA CURRENT INSTITUITIONAL ARRANGEMENT DISCHARGE State Government Dept of Environment Drainage & Irrigation Dept State Government State Water Dept Corporatized/ Private Companies Concessionaires IWK Private Operators State Government Premise Owner – water meter to sanitary discharge point within premise boundary National Water Resource Council Regulatory RolesOperational Roles

GENERAL FINANCING MECHANISM Sewerage tariff Huge subsidy from Federal Government Private developers & Sewerage Capital Contribution and Federal government PPP for major assets Water Industry Fund Subsidy from state government Water tariff State/Federal government Private developers for smaller distribution pipes Capital Contribution Fund (CCF) Water Industry Fund CAPEXOPEX CAPEX WATER SEWERAGE WATER & SANITATION DEVELOPMENT FOR RURAL AREA FULLY UNDER FEDERAL GOVERNMENT

PAAB Operator SPAN PAAB - non-profit national water asset holding company funded by Federal Government Can seek additional funds from capital market Cheaper cost of fund (AAA rating) Efficient asset and facilities management Licensed by SPAN with specific KPIs To enable operators achieve full cost recovery Transfer asset & liability Lease assets Operations and maintenance of: Treatment Distribution WATER ASSET MANAGEMENT COMPANY REGULATOR Licensed & regulated ASSET-LIGHT OPERATOR 8  Must adopt Regulatory Water Accounting (RWA)  Submit 3 years rolling and 30 years long term business plan  Meet KPI targets approved in the business plan  Financial facilities are only for operators whom migrated to this regime LICENSING FINANCING MODEL: ASSET LIGHT 3 years rolling business plan 30 years long term business plan KPI set based on operational services water and effluent quality financial Policy Objectives & Development Goals Water supply and demand Sewerage Catchment Strategy Tariff review PLANNING, MONITORING & REVIEW

CAPACITY DEVELOPMENT Before 1990-s 1990s – 2008 (after privatization) Since 2008 (Regulatory consolidation of potable water & sewerage) structure x Depending on operator effort Competency ad hoc and disorder Depending on operator effort Competency ad hoc and disorder Sewerage : Public operator engage with Department of Environment to implement competency program LEGAL ENABLER: Need for minimum qualifications; public consultations and formation of water forum √ x champion structure x x champion CHAMPION: SPAN (as regulator) √ CAPACITY BUILDING FRAMEWORK developed to structure capacity building needs of water services Leveraging on the Stakeholder Building up the Stakeholders

THANK YOU NATIONAL WATER SERVICES COMMISSION (SPAN) NATIONAL WATER SERVICES COMMISSION (SPAN) SEWERAGE REGULATORY DEPARTMENT SEWERAGE REGULATORY DEPARTMENT Ground &1 st Floor, Prima Avenue 7 Ground &1 st Floor, Prima Avenue 7 Jalan Teknokrat 6, Cyberjaya Jalan Teknokrat 6, Cyberjaya Selangor Darul Ehsan, MALAYSIA Selangor Darul Ehsan, MALAYSIA