States need to clean up their act before the jurisdiction over water supply is made a federal responsibility, said Energy, Water and Communications Minister Lim Keng Yaik today.

He said the state governments must not palm off the problem of non-revenue water to the federal government.

As the government draws its plans for a federal-regulated water model, aimed for the end of the year, it will "not be business as usual" for the state authorities and water suppliers, Lim told a press conference.

Rather, he said, in the next few months states must find solutions to the current mess of water supply in the country, where non-revenue water - the difference between the volume of water put into the system and the volume paid by customers - runs between 20 to 62 percent, bringing the national average of water loss to a high 40 percent.

"Don't give me a drowning baby and ask me to save it," he said, adding that states are spending too much on capital expenditure to build treatment plants and other infrastructure but failed to look at stemming the problem of water loss.

The high non-revenue water problem culminates from a combination of the poor condition of water pipelines, tampered reading metres, water pilfering, and improper billing.

Fraudulent practices

However, Lim also pointed out that state governments are responsible to look at how much of fraudulent practices contribute to non-revenue water.

"The billing personnel need to be checked. This is a big business...a few hundred million can easily go down the drain. When you deliver more water, and less (money) comes back in, then you have to check why this is so.

"Why are they (states) not checking? ... Maybe we should call in the Anti-Corruption Agency to check abuse," he said.

The minister said the federal government will be looking into 'sustainable' water supply models, rather than the current 'ad hoc' models adopted by states - where consumers often end up bearing high costs and the state governments end up paying private companies "through the nose".

With water pipe replacement estimated to cost the country about RM10 billion over the next 10 years, the government hopes that a single well-regulated industry with proper benchmarks on performance would encourage outside investments to pour in.

However, Lim declined to say exactly how or when privatisation will be resumed following federal takeover.

Foiled privatisation

He said the government will have to first tackle the legal and constitutional amendments required to transfer water from state responsibility to federal. This itself is a large task requiring time to formulate, before addressing privatisation.

"I am frightened that time is not on my side (to pursue legal and constitutional changes). States will need to amend the constitution. (Policy) structures will need to be in place first.

One major problem faced in Selangor as a result of foiled privatisation, is that the state government is currently saddled with a massive RM2.2 billion debt, owed to three private water supply and treatment companies.

Asked about Selangor's debt, Lim refused to be drawn into the issue, beyond saying: "What is owed, has to be paid."