Tan Sri Dato_ Ir. Hj Zaini Bin Omar-Strategic Initiatives
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Transcript of Tan Sri Dato_ Ir. Hj Zaini Bin Omar-Strategic Initiatives
SURUHANJAYA PERKHIDMATAN AIR NEGARA1
THE 4TH NATIONAL UTILITIES SUMMIT 2007
STRATEGIC INITIATIVES IN WATER SERVICES REFORM IN MALAYSIA
by: TAN SRI DATO’ IR. HAJI ZAINI BIN OMARChairman, National Water Services Commission (SPAN)28th - 29th August 2007Renaissance Hotel, Kuala LumpurMALAYSIA
SURUHANJAYA PERKHIDMATAN AIR NEGARA2
1. Strategic Initiatives for Reformi. Legal and Regulatory Framework
ii. Policy and Institutional Framework
2. Role of SPAN after WSIA ACT 2006
3. What’s next?
OUTLINE OF PRESENTATION
SURUHANJAYA PERKHIDMATAN AIR NEGARA3
AMENDMENT TO FEDERAL CONSTITUTION
Amendment to Federal Constitution pertaining to jurisdiction on water supply gazetted on 10 February 2005• Previously water supply was under State List• With amendment, water services and supplies are listed
under Concurrent List• Water source remains with State Government
Amendments to Federal Constitution 2005 enables Federal Government to regulate water services and State Government retains right to regulate raw water in the value chain of water cycle
SURUHANJAYA PERKHIDMATAN AIR NEGARA4
SOURCE
DAM
RIVER
TREATMENT
WATER TREATMENT PLANT
BALANCINGRESERVOIR
DISTRIBUTION
SERVICERESERVOIR
TRUNK MAIN
DISTRIBUTION MAIN
CONSUMER
STATE
CATCHMENT AREA
Before Federal Constitution Amendment
WATER SUPPLY SYSTEM
SURUHANJAYA PERKHIDMATAN AIR NEGARA5
SOURCE
DAM
RIVER
TREATMENT
BALANCINGRESERVOIR
DISTRIBUTION
SERVICERESERVOIR
TRUNK MAIN
DISTRIBUTION MAIN
CONSUMER
STATE FEDERAL
CATCHMENT AREA
WATER TREATMENT PLANT
After Federal Constitution Amendment
WATER SUPPLY SYSTEM
SURUHANJAYA PERKHIDMATAN AIR NEGARA6
COLLECTIONTREATMENT
RIVER
SEWAGETREATMENT PLANT
Sewerage remains under the jurisdiction of Federal Government
PRIVATE CONNECTION
PIPE
PUBLIC SEWER
A) Individual Septic Tank
B) Connected System
PREMISE OWNER
PREMISE OWNER
SEPTIC TANK
SEWERAGE SYSTEM
SURUHANJAYA PERKHIDMATAN AIR NEGARA7
An Act to provide for and regulate water supply services and sewerage services
Objective : to establish a licensing and regulatory framework for regulatory intervention to promote national policy objectives for the industry.
Does not affect general applications of existing laws on environment quality and land matters and existing State powers on water source.
Approved in Parliament in June 2006 and gazetted on 20th
July 2006
Date Act comes into force to be determined by the Minister
WATER SERVICES INDUSTRY (WSIA) ACT 2006 [Act 655]
SURUHANJAYA PERKHIDMATAN AIR NEGARA8
National Policy Objectives for the Water Supply and Sewerage Services Industry are:
i. To establish a transparent and integrated structure for water supply services and sewerage services that delivers effective and efficient service to consumers;
ii. To ensure long term availability and sustainability of water supply including the conservation of water;
iii. To contribute to the sustainability of the watercourse and the water catchment areas;
iv. To facilitate the development of competition to promote economy and efficiency in the water supply services and sewerage services industry;
v. To establish a regulatory environment which facilitates financial self sustainability amongst the operator in the water services and sewerage services industry in the long term;
NATIONAL POLICY OBJECTIVES
SURUHANJAYA PERKHIDMATAN AIR NEGARA9
vi. To regulate for the long-term benefit of the consumers;vii. To regulate tariff and ensure the provision of affordable
services on an equitable basis;viii. To improve the quality of life and environment through the
effective and efficient management of water supply services and sewerage services;
ix. To establish an effective system of accountability and governance between operators in the water services and sewerage services industry; and
x. To regulate the safety and security of the water supply system and sewerage system.
NATIONAL POLICY OBJECTIVES (Cont’d…)
SURUHANJAYA PERKHIDMATAN AIR NEGARA10
An Act to establish the Suruhanjaya Perkhidmatan Air Negara –SPAN (National Water Services Commission) and set out the function and powers of SPAN which includes:
To advise the Minister on the national policy objectiveTo implement and enforce the provisions of WSIATo supervise and monitor water supply services and sewerage services activitiesTo review and recommend tariffs
SPAN is the economic and technical regulatorApproved by Parliament in June 2006 and came into force on 1 Feb2007Chairman and CEO appointed on 1 March 20078 other members appointed on 2 April 2007Temporary office at Ministry of Energy, Water and CommunicationsBlock E4/E5, Parcel E, Putrajaya MalaysiaA launching grant of RM20 million was received on 22 May 2007 for the setting up and initial operation
SURUHANJAYA PERKHIDMATAN AIR NEGARA ACT 2006 [Act 654]
SURUHANJAYA PERKHIDMATAN AIR NEGARA11
Regulate the Water Services industry (Water and Sewerage services)
Regulatory mattersNational Water Services Commission (SPAN)
Ensures coordination with the various State Government in the management of the water basins.
Water Resource matters – Cross boundaries / Inter state / Issue of National interest
National Water Resource Council (NWRC) – chaired by Prime Minister
Regulate raw water abstraction and catchment management
Raw Water mattersState Government
Development of a holistic water policy for the country by setting policy directions.
Policy mattersFederal Government (Ministry of Energy, Water and Communications)
DESCRIPTIONAREA OF
RESPONSIBILITYBODY
POLICY & INSTITUTIONAL FRAMEWORK ON WATER SERVICES REFORM
SURUHANJAYA PERKHIDMATAN AIR NEGARA12
SAJH
ESB
SWC
JKAS
JBAPP
BAKAJ
BKAM
JAK
ABASS
AKSB
SATU
JBATFRAGMENTED
NON-UNIFORM LEGISLATION
DIFFERENT KPIs
DIFFERENT RULES
DIFFERENT PROCEDURES
DIFFERENT LEVELS OF SERVICE
NON-UNIFORM TARIFF SETTING PRINCIPLES
CURRENT WATER REGULATORY REGIME IN MALAYSIA
SURUHANJAYA PERKHIDMATAN AIR NEGARA13
SAJH
ESB
SWC
SPAN
SATU
• One regulatory body• Uniform legislation• Uniform regulation and
rules• Uniform tariff-setting
principles and procedures
• Standard Key Performance Indicators (KPIs)
• Standard Operating Procedures
• Standard product certification procedures
NEW WATER REGULATORY REGIME
ABASS
SURUHANJAYA PERKHIDMATAN AIR NEGARA14
PENGERUSITan Sri Zaini Omar
INTERNAL AUDIT UNIT
CHIEF EXECUTIVE OFFICER
SURUHANJAYA PERKHIDMATAN AIR NEGARA1. Y.Bhg. Tan Sri Dato’ Ir. Hj. Zaini Omar (Chairman)2. Y.Bhg. Datuk Suboh Mohd Yassin3. Y.Bhg. Dato’ Ir. Syed Muhammad Shahabudin4. Y.Bhg. Dato’ Zulkifly Rafique5. Y.Bhg. Dato’ Ir. Sonny Cheah Lai Shin6. Y.Bhg. Datuk Marimuthu Nadason7. Y.Bhg. Prof. Dato’ Ir. Dr. Zaini Ujang8. Tn. Hj. Japar Abu9. Dr. Chin Yoong Kheong10. Y.Bhg. Dato’ Teo Yen Hua (Chief Executive Officer)
LEGAL AND SECRETARIAL
SERVICES DIVISION
RESEARCH, DEVELOPMENT AND INOVATION
DIVISION
LICENSINGAND TARIFF
DIVISION
DATA ANDINFORMATION MANAGEMENT
DIVISION
TECHNICAL STANDARD
AND COMPLIANCEDIVISION
CATCHMENT PLANNING AND
CONTROLDIVISION
TECHNICALSTANDARD
AND COMPLIANCEDIVISION
ECONOMIC AND SOCIALREGULATORY DEPARTMENT
(DIRECTOR)
CONSUMER AFFAIRS, MONITORING AND
ENFORCEMENT DIVISION
RESOURCEPLANNING
AND ENGINEERINGSERVICES DIVISION
SEWERAGE REGULATORYDEPARTMENT
(EXECUTIVE DIRECTOR)
REGULATORY REFORM
AND INTEGRATIONDIVISION
REGIONAL OFFICES
Northern, Central, Southern and Eastern
CORPORATE AFFAIRSDIVISION
HUMAN RESOURCE
UNIT
WATER REGULATORYDEPARTMENT
(EXECUTIVE DIRECTOR)
DEPARTMENT
DIVISION
UNIT
SURUHANJAYA PERKHIDMATAN AIR NEGARA (SPAN)ORGANISATION STRUCTURE
SURUHANJAYA PERKHIDMATAN AIR NEGARA15
1. Strategic Initiatives for Reformi. Legal and Regulatory Framework
ii. Policy and Institutional Framework
2. Role of SPAN after WSIA ACT 2006
3. What’s next?
OUTLINE OF PRESENTATION
SURUHANJAYA PERKHIDMATAN AIR NEGARA16
WHO ARE BEING REGULATED?
REGULATED BY SPAN
PUBLICWATER
OPERATORS
PUBLICSEWERAGEOPERATORS
PRIVATE WATER
OPERATORSPRIVATE
SEWERAGE OPERATORS
WATER CONTRACTORS
SEWERAGE CONTRACTORS
MANUFACTURERS / SUPPLIERS
PLUMBERS• 4,500 nos.
• 1,409 nos.
• 2,235 CIDB Reg.• 2,953 PKK Reg.
• 3,000 nos.
• 300 nos. (Sewerage Products)
• IWK, PBT Kelantan, PBT Pasir Gudang + MBJB
• 20 nos.
SURUHANJAYA PERKHIDMATAN AIR NEGARA17
WATER OPERATORS
• Treatment and Distribution- Air Kelantan Sdn. Bhd.
(AKSB)- Perbadanan Bekalan Air
Pulau Pinang (PBAPP)
• Syarikat Air TerengganuSdn. Bhd. (SATU)
• Syarikat Air MelakaBerhad (SAMB)
• Jab. Bek. Air NegeriSembilan (JBANS)
• Lembaga Air Perak(LAP)
• Jab. Bek. Air Pahang• Jab. Bek. Air Labuan• Jab. Bek. Air Kedah• Jab. Kerja Raya Perlis
• Treatment only- SPLASH- Puncak Niaga (PNSB)- ABASS- Equiventure Sdn Bhd (ESB)- Southern Water Corp. (SWC)- Metropolitan Utilities (MUC)
• Distribution only- Syarikat Bekalan Air
Selangor (SYABAS)- SAJ
PRIVATE ENTITIESCORPORATE ENTITIES
GOVERNMENT ENTITIES
SURUHANJAYA PERKHIDMATAN AIR NEGARA18
Final stage of study by consultantJBA Kedah
Initial stage of study by consultantJBA Labuan
Consultant appointed
Final stage of approval at EPU
Final stage of approval at EPU
Final stage of approval at EPU
STATUS
Corporatisation of all remaining states to be completed by the end of 2007
TARGETTED DATE
Unit Air JKR Perlis
JBA Pahang
JBA N. Sembilan
Lembaga Air Perak (LAP)
STATE WATER AUTHORITY
CORPORATISATION STATUS OF STATE WATER AUTHORITIES
SPAN does not promote privatization but instead promotescorporatisation of State Water Authorities to enable themto operate as efficient corporate entities
SURUHANJAYA PERKHIDMATAN AIR NEGARA19
Efficientand
EffectiveWater Supply
Services
EconomicRegulation
EffectiveRegulation
ConsumerProtection
TechnicalRegulation
REGULATION FOCUS FOR REFORM UNDER WSIA ACT
SocialRegulation
SURUHANJAYA PERKHIDMATAN AIR NEGARA20
ECONOMIC REGULATION
As an Economic Regulator, SPAN recommends to the Minister for the granting of:a) Individual Licence to:• Own a public water supply system or public sewerage
system or any part of the system; or• Undertake, provide or make available any water supply
services or sewerage services or part of the services by means of operating a public water supply system or public sewerage system
b) Class Licence to:• Own a private water supply system or private sewerage
system or any part of the systems; or• Undertake, provide or make available any water supply
services or sewerage services or part of the services by means of operating a private water supply system or private sewerage system
[Section 4 – 28]
SURUHANJAYA PERKHIDMATAN AIR NEGARA21
ECONOMIC REGULATION
Approve 3 year rolling business plan and updated on an annual basis which details out:• The individual licensee’s plan for expansion,
maintenance, repairs, upgrading, improvement, refurbishment or alteration of the public water supply system or public sewerage system;
• The capital and operational expenses to be incurred for undertaking such activities
Individual licensee is responsible to carry out the activities set out in the approved business plan
[Section 30]
SURUHANJAYA PERKHIDMATAN AIR NEGARA22
TECHNICAL REGULATIONSetting up Standards of Performance and Key Performance Indicators (KPIs) for water services and sewerage services licencees [Section 180(a)(iv)]
• Examples: Drinking Water Quality, NRW, Response time to breaks, Low water pressure, Billing complaints
Allow only persons possessing qualification and holdings certificates to work, manage or operate water supply or sewerage system [Section 49]
Allow use or supply of standard equipment, device, material, system or facilities [Section 129]
Allow only contractors and plumbers who hold permit issued by SPAN to work on water supply or sewerage systems [Section 50]
Approves plan for construction of any water supply and sewerage system [Section 45]
SURUHANJAYA PERKHIDMATAN AIR NEGARA23
QUALITY OUTPUT
QUALITYPEOPLE +PROCESS
QUALITYINPUT
QUALITYOUTPUT
(INFRASTRUCTURE)
Quality• Materials• Products
Skilled, Competent
• Contractors• Plumbers
Standard,Proven
• Specification• Procedures• Best
Practices
The new regulatory regime is aimed to ensure:
QUALITYOPERATION &MAINTENANCE
Quality & Reliable
• Infrastructure / Facilities
Efficient• Operation• Facilities
Management and Maintenance
++ =
SURUHANJAYA PERKHIDMATAN AIR NEGARA24
CERTIFYING AGENCIES
SPAN may appoint Certifying Agencies (CA) for the purposes of:
a) Approving plans, specifications or detailed designs relating to construction of water supply / sewerage system
b) Issuance of permitsc) Certifying compliance with technical standards made
under any subsidiary legislation.
Approval by the CA shall be deemed to be approval by SPAN
Technical Audit will be carried out on CA to ensure compliance to standards and specifications
[Section 174]
SURUHANJAYA PERKHIDMATAN AIR NEGARA25
SOCIAL REGULATION
SPAN shall designate “Water Forum”• Main task is to protect the consumer’s interest
Function of Water Forum includes:• To give feedback and make recommendations to SPAN
on any matters concerning the interest of consumers of the water supply services and sewerage services;
• To represent the interest of consumers of the water supply services and sewerage services;
• To promote consumers interest in relation to the tariff and standards of water supply services and sewerage services;
SPAN shall have due regard to the recommendations of the Water Forum
[Section 69]
SURUHANJAYA PERKHIDMATAN AIR NEGARA26
CONSUMER PROTECTION
Prepare consumer standards which include procedures for:• reasonably meeting consumer requirements;• the handling of customer complaints and disputes;• the protection of consumer information.
Consumer standard may address:• provision of information to consumers regarding services
rates and performances;• service levels and quality of service to be provided to
consumers;• the provision of fault repair services;• customer charging, billing, collection and credit practices;
and• any other matters of concern to consumers.
[Section 68]
SURUHANJAYA PERKHIDMATAN AIR NEGARA27
PengurusanAset Air
Berhad(PAAB)
Federal Government
Build asset –WTP, Dist.
Network etc.
Operators
Lease
Lease Payment
Dams
(Based on affordability)Bond / Capital
market
Lease
Fund &Built
Ownership
ADDRESSING HIGH COST OF CAPEX REQUIREMENT THROUGH PAAB
3
1
2
12
SURUHANJAYA PERKHIDMATAN AIR NEGARA28
FUNDING OF WATER SERVICES INFRASTRUCTURE
Service LicenseeService LicenseeService Licensee-LEASEE
SPANSPANStateStateREGULATION
Source
PAAB (New)
PAAB (New)
PAAB
WTP / Reservoir / Distribution mains
Federal Gov / Private
Fed Government/Private
Federal Government
Sewerage System
-
-
State
Water Catchment
GovernmentOWNERSHIP
Dam
KTAKCONSTRUCTION
Federal GovernmentFUNDING
RIVER
SOURCE
DAM
RIVER
TREATMENT
WATER T/PLANT
BALANCINGRESERVOIR
DISTRIBUTION
SERVICERESERVOIR
TRUNK MAIN DISTRIBUTION MAIN
CONSUMERSEWAGET/PLANT
SEWERS
CATCHMENT AREA
COLLECTION TREATMENT
SURUHANJAYA PERKHIDMATAN AIR NEGARA29
THE GOAL
Licensing
Business Plan
Water Forum
AdequateFunding
Integration of Water
&
Sewerage Services
Comparative Regulations /
Benchmarking
KPIs / Standards RegulatedTariff
SURUHANJAYA PERKHIDMATAN AIR NEGARA30
THE GOAL
EFFICIENT, EFFECTIVE & SUSTAINABLE WATER AND
SEWERAGE SERVICES
SURUHANJAYA PERKHIDMATAN AIR NEGARA31
1. Strategic Initiatives for Reformi. Legal and Regulatory Framework
ii. Policy and Institutional Framework
2. Role of SPAN after WSIA ACT 2006
3. What’s next?
OUTLINE OF PRESENTATION
SURUHANJAYA PERKHIDMATAN AIR NEGARA32
Register within 3 months, authorization
issued (1 year)Fail to register,authorization
lapse
Apply licence afterauthorization expires
State Water / Sewerage Agencies / Board /
Authorities
TRANSITION AND MIGRATION
SURUHANJAYA PERKHIDMATAN AIR NEGARA33
Fail to register,authorization
lapse
Within 3 months after lodgement, commence
renegotiation
Fail to renegotiate,authorization to be revoked or licence
not grantedMigrate, licence issued Not migrate, authorization
issued until expiry of Concession Agreement
Register within 3 months, (lodge agreement and
supplementary agreement)
Concessionaires
Within 1 year, send notice to indicate migrating or not
Authorization issued for a period of 2 years
TRANSITION AND MIGRATION (Cont’d)
SURUHANJAYA PERKHIDMATAN AIR NEGARA34
Suruhanjaya Perkhidmatan Air Negara
THANK YOU
Daripada :
www.span.gov.my