Why is the government so intent on privatising the country's water
management when it should be funding public utilities that are
operationally viable but have been denied financial assistance?
This was part of a questionnaire accompanying a memorandum submitted to the Energy, Water and Communications Ministry by the Coalition Against Water Privatisation (CAWP) in Putrajaya this afternoon.
The document contained proposed amendments to the Water Services Industry (WSI) Bill 2005 and the National Water Services Commission (SPAN) Bill 2005 which are scheduled for tabling in Parliament next month.
On Feb 18, a public consultation in Kuala Lumpur rejected the two Bills in their current form and proposed several resolutions.
On final count, more than 270 representatives of trade unions, residents associations, statutory bodies, academia, political parties, consumer, religious and environmental groups attended the half-day session which began with an official briefing on the proposed laws.
But minister Dr Lim Keng Yaik last Friday dismissed the public consultation as "one-sided" and an agenda by the opposition and certain quarters to politicise the issue.
He also announced the setting up of the Water Asset Management Company (WAMCO), a business entity fully-owned by the finance ministry.
Drawing from the Feb 18 resolutions, the CAWP proposed that the government buy back privatised water concessions.
Kelantan, Johor and Selangor have privatised their water utilities while other states have either corporatised or are in various stages of it.
Buy-back concessions
The government was also asked to retain access as a fundamental human right, that water will not be privatised or handed over to private entities, to take back private water management, to conserve water resources and to protect its sources.
"We recommend that the government buy back the management of water from existing privatised companies with concession agreements that are not 100 percent owned by either the federal or state governments," read the memorandum.
"We propose that funds for Wamco be raised from local sources such as the Employees Provident Fund, Social Security Organisation and Lembaga Urusan Tabung Haji to avoid foreign exchange risk, a problem that is bleeding Tenaga Nasional Bhd and all Malaysians.
"In addition, Wamco can save millions of ringgit by not engaging international fund managers. Furthermore, we suggest a workers' cooperative allowing all employees working in public water utilities to have a stake in Wamco."
The CAWP also recommended the WSI to be re-named Sustainable Water Management (SWM) Bill and to stipulate that the control, management and ownership of water and related infrastructure is to remain with the state and public utilities or state-owned corporations.
Another suggestion was to push for public sector reform through an empowered regulator, parliamentary oversight, public scrutiny through full disclosure of information, civil society oversight via an empowered Water Forum.
In the questionnaire, the main poser was the government's haste and rationale in introducing the two laws when existing public utilities have been denied proper financial backing.
"Has the ministry identified the reasons why public utilities are inefficient and can it provide the reasons for it?
"Can it identify the clauses in the Bills which will reduce and eliminate these inefficiencies?"
They asked about the ownership of public utility assets under the newly-approved Water Assets Management Company which is wholly-owned by the Finance Ministry.
Identify weaknesses
The effectiveness of the proposed regulatory body was questioned since it would not have control over the private water providers' internal affairs such as directors' fee, wages, advertising, entertainment allowances and staff welfare.
The coalition comprising 26 civil society partner organisations asked if the ministry had identified the reasons why the existing regulatory structure at the states were ineffective.
"Can the ministry demonstrate how the commissioners and minister can be effective when grossly unfair concession agreements have already been signed under this minister's watch?
"Can it demonstrate how it plans to enforce its regulations when the current minister is unable to regulate one private sector operator?"
The group also noted the absence of any provision in the Bills for full transparency.
"Can the ministry point out the exact clause which states that all information is to be provided to the public including the terms of the licenses?"
The CAWP wanted to know if the ministry has done a cost benefit analysis on the implementation of Span as opposed to implementing state-level institutional reforms.
"Should not water resource management be a part of the Bill? How will SPAN address the loss of managerial autonomy of water utility providers to the respective state's politicians, a factor that has contributed to prevailing problems at the state level?"
Water privatisation has been a thorny issue over the last few years
largely due to the government's inability to act against Selangor's
largest water provider, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas),
which was granted a 30-year concession in January 2005.
This was part of a questionnaire accompanying a memorandum submitted to the Energy, Water and Communications Ministry by the Coalition Against Water Privatisation (CAWP) in Putrajaya this afternoon.
The document contained proposed amendments to the Water Services Industry (WSI) Bill 2005 and the National Water Services Commission (SPAN) Bill 2005 which are scheduled for tabling in Parliament next month.
On Feb 18, a public consultation in Kuala Lumpur rejected the two Bills in their current form and proposed several resolutions.
On final count, more than 270 representatives of trade unions, residents associations, statutory bodies, academia, political parties, consumer, religious and environmental groups attended the half-day session which began with an official briefing on the proposed laws.
But minister Dr Lim Keng Yaik last Friday dismissed the public consultation as "one-sided" and an agenda by the opposition and certain quarters to politicise the issue.
He also announced the setting up of the Water Asset Management Company (WAMCO), a business entity fully-owned by the finance ministry.
Drawing from the Feb 18 resolutions, the CAWP proposed that the government buy back privatised water concessions.
Kelantan, Johor and Selangor have privatised their water utilities while other states have either corporatised or are in various stages of it.
Buy-back concessions
The government was also asked to retain access as a fundamental human right, that water will not be privatised or handed over to private entities, to take back private water management, to conserve water resources and to protect its sources.
"We recommend that the government buy back the management of water from existing privatised companies with concession agreements that are not 100 percent owned by either the federal or state governments," read the memorandum.
"We propose that funds for Wamco be raised from local sources such as the Employees Provident Fund, Social Security Organisation and Lembaga Urusan Tabung Haji to avoid foreign exchange risk, a problem that is bleeding Tenaga Nasional Bhd and all Malaysians.
"In addition, Wamco can save millions of ringgit by not engaging international fund managers. Furthermore, we suggest a workers' cooperative allowing all employees working in public water utilities to have a stake in Wamco."
The CAWP also recommended the WSI to be re-named Sustainable Water Management (SWM) Bill and to stipulate that the control, management and ownership of water and related infrastructure is to remain with the state and public utilities or state-owned corporations.
Another suggestion was to push for public sector reform through an empowered regulator, parliamentary oversight, public scrutiny through full disclosure of information, civil society oversight via an empowered Water Forum.
In the questionnaire, the main poser was the government's haste and rationale in introducing the two laws when existing public utilities have been denied proper financial backing.
"Has the ministry identified the reasons why public utilities are inefficient and can it provide the reasons for it?
"Can it identify the clauses in the Bills which will reduce and eliminate these inefficiencies?"
They asked about the ownership of public utility assets under the newly-approved Water Assets Management Company which is wholly-owned by the Finance Ministry.
Identify weaknesses
The effectiveness of the proposed regulatory body was questioned since it would not have control over the private water providers' internal affairs such as directors' fee, wages, advertising, entertainment allowances and staff welfare.
The coalition comprising 26 civil society partner organisations asked if the ministry had identified the reasons why the existing regulatory structure at the states were ineffective.
"Can the ministry demonstrate how the commissioners and minister can be effective when grossly unfair concession agreements have already been signed under this minister's watch?
"Can it demonstrate how it plans to enforce its regulations when the current minister is unable to regulate one private sector operator?"
The group also noted the absence of any provision in the Bills for full transparency.
"Can the ministry point out the exact clause which states that all information is to be provided to the public including the terms of the licenses?"
The CAWP wanted to know if the ministry has done a cost benefit analysis on the implementation of Span as opposed to implementing state-level institutional reforms.
"Should not water resource management be a part of the Bill? How will SPAN address the loss of managerial autonomy of water utility providers to the respective state's politicians, a factor that has contributed to prevailing problems at the state level?"
Water privatisation has been a thorny issue over the last few years
largely due to the government's inability to act against Selangor's
largest water provider, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas),
which was granted a 30-year concession in January 2005.
Syabas allegedly violated a number of provisions in the concession
agreement, including a finance ministry directive in 2000 that requires
open tender, government approval and the use of local labour and
resources for all public-funded projects.
Consequently, critics accused the minister of double-speak for making inconsistent statements and inaction against Syabas despite the reported complaints.
Early last year, the government pushed through constitutional amendments which effectively put water in the concurrent list - under shared federal and state jurisdiction.
The 11-member delegation comprised leaders of the Malaysian Trades Union Congress (MTUC), Research for Social Advancement, Section 5 Residents Association, Consumers Association of Penang/Sahabat Alam Malaysia, Global Environment Centre, Malaysian Human Rights Society and Monitoring Sustainability of Globalisation.
Consequently, critics accused the minister of double-speak for making inconsistent statements and inaction against Syabas despite the reported complaints.
Early last year, the government pushed through constitutional amendments which effectively put water in the concurrent list - under shared federal and state jurisdiction.
The 11-member delegation comprised leaders of the Malaysian Trades Union Congress (MTUC), Research for Social Advancement, Section 5 Residents Association, Consumers Association of Penang/Sahabat Alam Malaysia, Global Environment Centre, Malaysian Human Rights Society and Monitoring Sustainability of Globalisation.
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