Water supply and sanitation in Malaysia

Malaysia: Water and Sanitation
Data
Access to an improved water source	100% [1]
Access to improved sanitation	96% [1]
Continuity of supply (%)	not available
Average urban water use (liter/capita/day)	344 (total), 226 (residential) [2]
Average water and sanitation tariff (US$/m3)	0.39 (2007) [2]
Share of household metering	100% [2]
Annual investment in WSS	unknown
Share of self-financing by utilities	low
Share of tax-financing	high
Share of external financing	unknown
Institutions
Decentralization	Partial (operation and maintenance at the state level)
National water and sanitation company	Pengurusan Aset Air (Asset ownership for water), Indah Water Konsortium (Sanitation) - both only for peninsular Malaysia
Water and sanitation regulator	National Water Services Commission (SPAN) - only for peninsular Malaysia
Responsibility for policy setting	Ministry of Natural Resources, Environment and Climate Change
Sector law	Water Services Industry Act 2006
Number of service providers	12 (water only)

Water supply and sanitation in Malaysia is characterised 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 management company and commercialised 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.