KEYNOTE ADDRESS BY
Y.B. DATO’ SRI PETER CHIN FAH KUI,
MINISTER OF ENERGY, GREEN TECHNOLOGY AND WATER MALAYSIA
AT THE NATIONAL WORKSHOP ON
“ACCELERATING THE IMPLEMENTION OF
NON REVENUE WATER SOLUTIONS IN MALAYSIA”
TUESDAY, 13 DECEMBER 2011, 3.00 PM
THE CORUS HOTEL,
KUALA LUMPUR
‘MAKING NRW WORK IN MALAYSIA”

Y.Bhg Datuk Loo Took Gee
Secretary General,
Ministry of Energy, Green Technology & Water

Y.Bhg Dato’ Teo Yen Hua,
Chief Executive Officer,
National Water Services Commission, Malaysia

Yang Berusaha Encik Sutekno Ahmadbelon,
Senior Under Secretary, Water Services Division
Ministry of Energy, Green Technology & Water
Yang Berusaha Ir. Dr. Hasnul Bin Mohamad Salleh
Director General, Water Supply Department
Ministry Of Energy, Green Technology and Water
Dato’-Dato’/Datin-Datin,
Distinguished Guests,
Workshop Participants,
Members of the Media,
Ladies and Gentlemen,
Salam Sejahtera and Salam 1Malaysia,

INTRODUCTION

1.    I would like to record my heartfelt thanks to the Organizing Committee for inviting me to deliver a keynote address entitled “Making NRW Work in Malaysia” at this Workshop today. The organization of this Workshop is timely as it will provide a good platform for the Water Operators and key stakeholders to discuss and seek to present a way forward for dealing with the chronic Non Revenue Water levels through sharing of experiences in comprehensive water loss reduction strategies and programmes.

2.    One of the major challenges facing our water utilities is the high level of water loss in distribution networks. Typically, non revenue water (NRW), is between 15% and 30% in the developed world but elsewhere it is more likely to be in the range of 30% to 60%. In Malaysia, the national average NRW level had been languishing at around 36% to 38% for some years now. The level of NRW is fluctuating at all States with the NRW figures of some States reaching as high as 55 percent.

3.    This has been a matter of grave concern to the government. However, it has been shown that efficient delivery of water services and reduction of NRW can be achieved. This is seen in the few successful examples of utilities reducing their NRW levels, with Pulau Pinang maintaining at below 19% for several years now followed closely by Melaka at 25%. Under the new funding model of Pengurusan Aset Air Berhad (PAAB), some significant improvements are also seen in the other two migrated States of Negeri Sembilan and Johor.

Non Revenue Water : The Setting

Ladies and Gentlemen,

4.    Water losses and NRW within a utility’s network are an enormous source of wastage. They add greatly to operating costs and present a major barrier to improvement or extension of services to the unserved and new development areas. Leaks can add great complication and expense to the sustainable management of water services. Hence, reducing water losses is a key issue in enhancing water supplier performance and to ensure adequate water supply to the population – even to those with sufficient drinking water.

5.    Through the regulatory framework under SPAN, the Ministry of Energy, Green Technology and Water will pursue NRW reduction and water conservation as one of the key strategies along with increasing production capacity and expanding networks to meet demand. As we are much aware, the current practice of addressing NRW in Malaysia had been done mostly adhoc on a project basis as opposed to a more holistic all round approach that calls for complementary technical, managerial and operational solutions.  I am sure all of us can agree that reducing NRW cannot be solved through projects alone. NRW reduction is very much part and parcel of Operations and Maintenance that require follow through effort to maintain the low levels once initial progress is made. A utility should consider what will happen after the project have been completed. NRW management is not a one-time effort but a never-ending, ongoing activity. For instance, while the contractor under a project can remove the backlog of leaks, new leaks will appear afterwards. It is therefore essential that the utility have plans after the contract expires. I reckon this is where we had failed. Perhaps the workshop can discuss how to deal with this core issue to continue NRW control in a successful and sustainable manner.

“Making NRW Work in Malaysia”

Ladies and Gentlemen,

6.    The need for NRW management in Malaysia in particular, is so obvious that it is hard to understand why efforts to improve the situation have been so limited. While the benefits of reducing NRW are well known, decades of effort have not delivered much improvement in the country. While there are many explanations and excuses, to my mind, much of the failure is due to underestimating the technical difficulties and complexity of NRW management, along with the potential benefits of taking action.

7.    Recognising the gravity of the situation, my Ministry has identified NRW as an issue to be given top priority attention both in the short and long term. I had requested SPAN, together with water operators and other key stakeholders to come together, discuss and brainstorm in a workshop to address and propose plans that require the immediate attention and action on the part of the water operators to make NRW reduction programme work in Malaysia.

8.    For this, I would like to suggest participants to take a critical review at the current efforts in NRW reduction, what are the things holding us back, and why are we not making gains from our investments and what are the new ways we can adopt to address the problem. To move the NRW plans forward, a shift in our traditional way of planning may be required. In this regard, two approaches immediately come to my mind; i.e the way of Business Unusual and Thinking outside the box.

Business Unusual

Ladies and gentlemen,

9.    NRW is a good indicator for water utility performance; high levels of NRW typically indicate a poorly managed water utility. Conversely, successful utilities actively address NRW by controlling physical losses, ensuring customer meter accuracy and making all efforts to keep the number of illegal connections within limits. Taking these measures can boost revenue by increasing the amount of water that can be billed while reducing wastage of the product. This increases profitability and improves the return on investment. With larger profits, the utility can then reinvest retained earnings and improve its productivity. We must take cognizance that dilapidate, outdated networks present an enormous potential for efficient enhancement and we need to leverage on this opportunity available to us. 

10.    Reducing and controlling NRW is complex. My own assessment is that many programs to reduce NRW have failed in the long run when they are conducted under the “Business as Usual” scenario. On the other hand, it is the government’s desire to see the NRW programme being accelerated in order for us to make quantum gains in the near term, I would envisage a ‘Business Unusual’  approach may have to be adopted.  I would urge water operators and the other stakeholders to work together to see if the business model and arrangement can be enhanced through changes in mindset, conventional approaches and processes to accelerate the implementation and more importantly, the sustainability of NRW control and management in Malaysia. Perhaps we can tap the presence and experience of our counterparts from the Singapore Public Utility Board who are here as our special guests and learn from them the best practices and successes.

Thinking outside the Box

Ladies and gentlemen,

11.    “Thinking outside the box” is to think differently, unconventionally, or from a new perspective. To think outside the box is to look further and to try not thinking of the obvious things, but to try thinking beyond them. Although the techniques and institutional aspects involved in a leakage control programme are well known, I believe we are making little progress as the NRW problems in Malaysia are substantial and enormous efforts are needed to address them.  Experiences in the past found us caught in the vicious circle of inadequate funding, institutional constraints, and stakeholders indifference, deteriorating service levels, etc. Again, among others, I would suggest that the participants in the workshop to make concerted efforts and “think outside the box” for solutions to the enormous problem ahead of us. A good starting point would be a re-look and re-assess alternative policy for a new way to pursue for successful reduction of water loss. This would include looking at wider considerations than simple changes in institutional and funding options within an existing set up.

12.    In this respect, it would be very helpful if the workshop can discuss on the questions facing the industry at the present time and how to address them creatively:

•    What target level of leakage should we aim for?
•    How can we justify the cost to reach this target level?
•    How long will it take us to achieve this level?
•    What are the techniques we should use to achieve the target level?
•    What will it cost in capital and operating expenditure?
•    How much will we save in production, distribution, and investment costs?
•    What will be the effect on customers?

Ladies and gentlemen,

13.    I am fully aware that the tasks ahead of us to accomplish all we set out to do is not easy. However, I like to encourage all planners, policy-makers, operators and stakeholders that it is not too late for us to achieve our goal of presenting a way forward to achieve a reasonable and sustained level of NRW in the near term. Please remember too that water loss reduction can also be transformative, catalyzing an upward spiral of improvements within a water utility. The investments made in water loss reduction can reap enormous savings, improve customer satisfaction and place the utility in good standing to face greater challenges in ensuring water services reliability and security.

14.    With the cooperation and input from all of you from the workshop, I hope to see more structural and operational changes made - changes that are workable and at the same time incorporating the best practices for a  sustainable NRW management in Malaysia. I look forward to the report and proceedings from the workshop. Towards this end, I can assure you that the government, particularly the Ministry of Energy, Green Technology and Water will give full support to efforts taken in the national interest to ensure the accelerated NRW reduction programme is successfully implemented.  Finally, I wish you all a fruitful discussion.

15.    On this note, it is my great pleasure to declare the workshop for ACCELERATING THE IMPLEMENTION OF NON REVENUE WATER SOLUTIONS IN MALAYSIA” officially opened.

Thank you.