PETALING JAYA: Businesses and consumers are bracing for a hike in water tariffs and the end of free water even as the conclusion to the Selangor water saga is in sight with the acquisition of Splash for RM2.55bil.

Fomca chief operating officer Saravanan Thambirajah said it was inevitable that Selangor consumers would have to start paying water tariffs again.

“Many water utility providers are running at a loss and can barely cover their operational expenses. How are they able to invest in new water infrastructure?” Saravanan said yesterday.

It was reported that Mentri Besar Amirudin Shari had agreed in principle for Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) to accept the offer worth RM2.55bil from Pengurusan Air Selangor Sdn Bhd (Air Selangor).

Saravanan, who also heads the Water and Energy Consumer Asso­cia­tion of Malaysia (Wecam), said a lot of Selangor’s water infrastructure, such as treatment plants and water pipelines, were aged or failing.

“Even more money would be needed for repairs and upgrades of equipment,” he said.

He also said consumers should be aware of conservation.

“The United Nations suggests a daily water usage of 165 litres.

“But Malaysians go well over 200 litres,” he said, adding that Selangor residents might need to brace for rationing, as had happend in 2016.

He said stakeholders, such as the National Water Commission (Span), Air Selangor, residents associations and businesses in the state, need to come to an agreement on the rate of tariffs.

Association of Water and Energy Research Malaysia (Awer) president S. Piarapakaran said there were both definite cost savings, and also a potential tariff increase, if the proposed acquisition went through.

“From Awer’s viewpoint, ending the concession agreements are good, as previously, you have price markups from the treated water suppliers to Air Selangor (formerly Syabas), and from Air Selangor to the end user,” he said.

However, he asked what would be the extent of Splash’s liabilities that Air Selangor had to absorb.

“The extent of the liabilities is important to ratepayers like us,” he added.

In addition to Splash’s liabilities, a tariff review might seem inevitable once the Langat 2 water treatment and distribution facility was completed, he added.

He said Awer forecasts a single-digit tariff increase, and also projected a cost impact of 20sen per cubic metre across the board for tariffs for Langat 2 alone.

KW Yeo, who runs a seafood restaurant in Petaling Jaya, said a tariff increase was probably inevitable.

“The government also has to recoup the costs of acquiring the concessionaire, so costs are passed down to the users,” he said.