All water operators and water asset owner are regulated by SPAN through the new licensing framework

Under the WSIA licensing framework, a Facilities License is required for the ownership of water infrastructures whilst the operator of these infrastructures would be required to apply to SPAN for a Service License. This new approach will ensure that water operators continue to provide quality water and services to the consumers. Failing which, their licenses may not be renewed.

Separation of responsibility between water operators and water asset owner

The separation of ownership from the operation of water infrastructure is aimed at driving the industry towards financial sustainability as well as better efficiency.
With the burden of financing and developing new water infrastructures transferred to PAAB, water operators are free to focus their full efforts on achieving operational efficiencies.

Corporatisation of State Water Supply Authorities to improve efficiency

State Water Supply Authorities, the Government agencies which currently operates the water services in most states, will be corporatised to enable them to operate as efficient corporate entities. It is also to ensure that revenues generated from water services operation are reinvested in the water supply sector.

Performance of water operators to be monitored through Key Performance Indicators (KPIs)

The performance of water services operators will be monitored through Key Performance Indicators and other standards that are imposed by SPAN. Those who fail to meet the required standards may have their Service license revoked. These licenses are renewable on a 3-year basis.

Setting of tariff based on uniform principles and procedures

The setting of water services tariff is based on uniform principles and procedures and is subject to approval by SPAN. Currently, the State water operators decide on their respective tariff levels based on varying considerations.

No new water services concessions

No more water services concessions will be awarded in the future. Existing concessionaires that choose to remain with their concession agreements are allowed to operate until the end of their concessions but will be subjected to the provisions in WSIA.

Cessation of provision of Federal Government soft loans to State Governments for water infrastructure development

Federal Government will no longer provide loans to State Governments except to Sabah and Sarawak , for the development of water services infrastructure. The responsibility to finance and develop new water infrastructure will be transferred to PAAB. As a Government-owned company, PAAB is eligible for more favourable financing rates which will translate to better tariff rates for the consumers.
The water infrastructures will be leased to the water operators for operation and maintenance.

The establishment of Water Forum

The establishment of the Water Forum is to, amongst others, ensure that the consumers’ interests are protected. One of the functions of the Water Forum is to provide feedbacks and recommendations to SPAN on any matters concerning the interest of consumers of water supply and sewerage services.