COUNTRY SANITATION ASSESSMENT IN MALAYSIAREPORT

November 20111

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TABLE OF CONTENTS
Page
1. FEATURES OF THE MALAYSIAN SEWERAGE AND SANITATION

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2.

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SEWERAGE SYSTEMS IN MALAYSIA(1)Changes in the Malaysian sewerage technology(2)
Changes in the Malaysian sewerage administration(3)
Present wastewater management in Malaysia(4)
Sewerage finance in Malaysia(5)
Maintenance of Wastewater Treatment Facilities

3. GRANTS-IN-AID FROM OVERSEAS AID AGENCIES AND A TOUR OF WASTEWATER TREATMENT PLANTS
3.1
Bunus Centralized Sewage Treatment Plant (Kuala Lumpur)(1)
Outline of the plant(2)
Wastewater treatment process(3)
Sludge treatment process
3.2
(1)
(2)
(3)
4.

Southern Klang Valley Sludge Treatment Plant (Klang Valley District,Selangor State)
Outline of the plant
Septage treatment process
Wastewater treatment process

WATER SECTOR REFORMS IN MALAYSIA(1)
Problems in the water supply and sewerage sectors in Malaysia(2)
Structural reform of the Malaysian water supply and sewerage sectors(3)
Impacts of the structural reform of the Malaysian water supply and sewerage
sectors and PPP

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14
14
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15
15
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5. SEPTAGE MANAGEMENT IN MALAYSIA(1)Present state

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17

6.

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WORKING ON THE IMPROVEMENT OF THE SEWERAGE SYSTEM(1)
Problems to be solved in the Malaysian sewerage system (including
pending ones)(2)
Sewerage system to be proposed by Japan

18
18

REFERENCES

19

SOURCES

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MEETINGS IN MALAYSIA

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3

1. FEATURES OF THE MALAYSIAN SEWERAGE AND SANITATION
The features of Malaysian Sewerage and Sanitation can be summarized as follows.
1)

2)

3)
4)
5)

In Malaysia, access to “Improved Sanitation” in 2010 reached 96 percent and sewerage diffusion in
urban areas covered about 70% percent of the population, which are significantly high among thedeveloping countries of Asia.
From the 1980s, the government introduced a policy that obliges housing developers to build
sewerage systems for areas gathering more than 30 households of 150 population equivalent (PE).
This resulted in the diffusion of many small-scale wastewater treatment facilities all over thecountry, which are gradually being connected to large-scale sewerage systems to complete thepublic sewerage system.
Malaysia is one of the few developing countries that obtained a certain success in septage
management for sanitation improvement.
A same administrative body manages the collection and treatment of sludge from seweragesystems and septic tanks.
In addition to this administrative body, a specialized organization called Indah Water Konsortium(IWK) has the responsibility and is entrusted for wastewater management and sludge collection
and treatment.
IWK differs from the Japan Sewage Works Agency in that the latter focuses on the construction ofsewerage facilities, while the former concentrates on maintenance.

For information, Table 1 shows general data on Malaysia to understand the economic aspect of thiscountry.
Concerning the nominal GDP per person in Southeast Asia, Malaysia is the third country after Singapore
at US$43,000 and Hong Kong at US$32,000. We think that this contributes greatly to sanitation.

1. Area

Table 1: General data on Malaysia
About 330,000 km2

2. Population

28,400,000 people (Department of Statistics, 2010)

3. Ethnic groups

Malay (66%), Chinese (about 25%), and Indian (about 8%)
Note: The first group includes races other than Chinese and Indian.

4. Languages

Malay (official), Chinese, Tamil, and English

5. Religions

Islam (federal), Buddhism, Confucianism, Hinduism, Christianity,
and native faith

6. Key industries

Manufacturing (electric appliances), agriculture and forestry(natural rubber, palm oil, and timber), and mining (tin, crude oil,and LNG)

7. Real GDP

US$173,800,000,000 (2010)

8. Nominal
personGDP

per US$8,323 (2010)

9. GDP growth rate

7.2% (2010)

10. Customer price increaserate

1.7% (2010)

11. Assistance from Japan(accumulated amountas of FY 2009)(1) Loan aid: 969,300,000,000 yen (Exchange of Notes)(2) Grant aid: 13,800,000,000 yen (Exchange of Notes)(3) Technical cooperation: 109,600,000,000 (JICA’s expenses)
412. ODA from key countries(net disbursements in2008 shown by DAC)Japan:
US$113,830,000
GB:
US$18,920,000
Germany: US$10,830,000

13. Key bilateral treaties
and agreements

Economic partnership agreement between Japan and Malaysia(signed in December 2005 and entered into force in July 2006)

2. SEWERAGE SYSTEMS IN MALAYSIA(1)Changes in the Malaysian sewerage technology

Figure 1 shows period-by-period changes in sanitation improvement and wastewater treatment in
Malaysia, which was presented by IWK at the conference “2nd IWA Development Congress & Exhibition,
PIONEERING WATER SOLUTIONS IN URBANISING AREAS” held in Kuala Lumpur on November 21 to 24,
20112).
According to the presentation, from the 1950s to the 1960s Malaysia focused on the primary treatmentof wastewater to improve public sanitation, and promoted the use of non-flush toilets with pit latrines,
flush toilets with pour flush latrines, and septic tanks.
In the 1970s and later, the government aimed at the secondary treatment of wastewater to purify
polluted rivers as the next step of public sanitation. Imhoff tanks were diffused in the 1970s, as well as
the stabilization pond method (OP or oxidation pond shown in Figure 1) and the aerated lagoon process(AL indicated in Figure 1) in the1980s, and the activated sludge and biological filtration processes in the
1990s.
Since around 2000, the Malaysian government has focused on environmental preservation to introduce
and install wastewater treatment plants that can remove nitrogen and phosphorus.

Figure 1: Period-by-period changes in Malaysian sewerage systrems2)5

(2)Changes in the Malaysian sewerage administration

1)

Before the 1980s

Before 1957, when Malaysia declared its independence, local sanitation committees were responsible
for sanitation in rural areas while local governments managed sanitation in urban areas.
From the end of the 1960s, the Malaysian government launched of a series of five-year plans which hadfor purpose to construct appropriate sanitation facilities in both urban and rural areas. At that time,
septic tanks were the main sanitation systems and, in the 1970s, the government started a “National
Sewerage Development Program” to develop sewerage facilities in major cities with the aim to introduce
modern sewerage systems in urban areas. This program was integrated into the five-year development
plan and resulted in the development of a series of master plans. However, due to the inability ofexisting financing structures and the difficulty for the government to gather sufficient resources, thesemaster plans were implemented in only Kuala Lumpur, Butterworth, and Kinabalu. As a result, sewerage
services and development were fully entrusted to local governments, which faced difficulties as well,such as financial shortage and lack of knowledge to provide modern sanitation infrastructure.
2)

After the 1980s

In the 1980s, to slow a rise in population having no basic sanitation, the Malaysian government
developed a new policy. This obliged any development projects for 30 households or 150 people
equivalent to install a sewerage system. Meanwhile, septic tanks for individuals or communities
prevailed in places with a more limited number of houses. This new arrangement has encouraged theprivate sector to play a key role in developing sewerage systems in Malaysia, building about 70 to 80
percent of the wastewater treatment infrastructure. The arrangement has also enabled the public sector
to give priority to infrastructure construction for drinking water and energy, and to delay the investment
in large-scale sewerage.
Notwithstanding, a rise in the number of small-scale sewerage systems resulted in an accumulation of awide range of low-cost technologies for wastewater treatment and disposal systems while leaving
unsolved the problem of houses without wastewater treatment facility. In an effort to regulate andstandardize sewerage products, the government set up an inter-ministry committee, formed under the
Ministry of Housing, in charge of approving new construction systems built by developers.
Until 1994, 144 local governments controlled sewerage services all over the country. However, these
services were not consistent and in many areas, standards were not met. The federal government
understood the need for improving the sanitation level of the country and passed the Sewerage Service
Act (SSA) in 1993. The purpose of the Act was to make Malaysia an advanced nation with modern
infrastructure. According to the Act, the federal government became responsible for controlling all
sewerage assets and signed a concession agreement with IWK to entrust the management of sewerage
services. The contract included operation, maintenance, and development (that is, upgrading,rehabilitation and expansion of sewerage infrastructure) over a 28-year concession period.
More specific purposes were to build infrastructure, to improve the efficiency of investments andservices, to reduce the governmental involvement ratio, and to provide a venue for competition from theprivate sector. The Sewerage Service Department (SSD) was organized under the control of the Ministryof Housing and Local Government (currently under the Ministry of Energy, Green Technology, and Water)
to regulate and monitor sewerage services entrusted to IWK. The concession covers the entire country
except the states of Johor, Kelantan, Sabah, and Sarawak, which remain under the control of theirrespective local governments. When management was transferred to IWK, the ratio of connection to6sewerage was 5 percent and large-scale sewerage systems were installed only in large cities having a
population of more than 100,000 persons. IWK agreed to increase the sewer connection rate to 85
percent in major cities and to 30 percent in small to medium cities, and to conduct septage
management.
IWK planned activities and first conducted a number of sewerage studies in order to assess demand andcapacity from a 30-year planning horizon. Next, IWK designed a 3-phase strategy according to the study
results. The phases were (1) locating and upgrading the old wastewater treatment plants as well as
increasing septage collection capacity, (2) using available oxidation ponds as a temporary measure forseptage treatment and constructing trench treatment facilities in accordance with the guidelines
provided by the Department of Environment, and (3) building centralized and mechanized treatment
facilities in areas with high population density. In addition, IWK developed a database of the houses
connected to a septic tank and started scheduled desludging by geographic area.
IWK made several-year efforts to let the residents understand the value of sanitation and raiseawareness on the importance of good practices and the acceptance of desludging and sewerage charge
payment.
3)

Recent years

Pump stations

Wastewater treatment plants

To improve operation and maintenance, IWK has gradually taken over sewerage systems of various sizes
and types. From 1994 to 2008, more than 8,800 systems have become public systems and come under
IWK’s control while more than 3,000 systems remain under the direct management of the owners and,thus, are classified as private systems. IWK does not own the public facilities but only operates andmaintains them, which gives this organization the right to collect sewerage charges. On average, IWK
takes over 300 treatment facilities and 1,000 km of sewer network yearly. However, in areas wherelarge-scale sewerage systems are not provided, private developers will continue to construct small-scale
sewerage systems.

Figure 2: Wastewater treatment plants transferred to IWKfrom 1994 to 2008

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4)

Legal system and IWK’s operation

IWK’s involvement as a contractor introduced a sewerage charging system for individuals and enterprises.
The system induced citizen’s complaints, resulting in three-time charge reduction.
Furthermore, the sewerage charges could not cover the business expenses and IWK had difficulties tocollect the charges which if continued would have led the company to insolvency and would haveaffected sewerage services. As a result, IWK was placed under governmental control in 2000. Since then,
IWK has been managed as a private company while the government, under the Ministry of Finance, hasbeen controlling capital expenditure. SSD took the new responsibility of being an implementing agency
managing sewerage constructions, in addition to its previous role as a regulator of the sewerageindustry.
In 2006, the Malaysian Parliament passed the Water Service Industry Act (WSIA), which replaced theSewerage Service Act. The latter provides the regulatory framework of sewerage and septage
management, and requires the owners and occupants having septic tanks to take the responsibility ofoperating and maintaining them appropriately. Under the previous legal arrangement, IWK had no rightto oblige the users to pay desludging costs and sewerage charges, or to impose a fine on them. The newact features the integration of drinking water and sewerage services. This holistic approach to water
management enables enforcement and water supply cut on users who do not pay sewerage charges.
This framework also reinforced SSD’s roles and provided by law a new regulator, SPAN (Suruhanjaya
Perkhidmatan Air Negara or National Water Services Commission).
SSD became a project implementation agency, in charge of defining the planning for new constructions
and upgrades of sewers and wastewater treatment plants. Through the monitoring and regulation ofsewerage services, SPAN follows the performance of IWK. To improve the quality of new systems
constructed by the private sector, SPAN provides them guidelines to ensure that new facilities are built
according to the standards set and that the effluent would be able to meet the quality requirements
determined by the Department of Environment. Accordingly, the developers must select any of thesystems that are approved by SPAN.
One of Malaysian sanitation characteristics is that sewerage systems and septic tanks are equallyconsidered to contribute to the improvement of sanitation regardless of whether they are constructedby the public sector or the private sector. Therefore, based on this concept, both systems’ regulation,
operation and maintenance are provided by the same organizations.
The ratio of connected houses to the sewerage system was 5 percent in 1993, but it drastically increased
to reach about 70 percent in 2010. Furthermore, the number of wastewater treatment plants that
conform to the standards for discharged effluent increased year after year. In 2006, 69 percent ofwastewater treatment plants met the BOD standard and 88 percent of them complied with the SS
standard.
(3)

Present wastewater management in Malaysia

1)Classification of wastewater treatment facilities6)

Table 2 shows the classification of public and private wastewater systems that treats grey and black
water through proper treatment facilities or septic tanks.
IWK operates and maintains about 5,800 wastewater treatment facilities all over the country, which
cover a population equivalent (PE) of 19,500,000 people (2010). In the past, a communal septic tank8

used for an apartment was regarded as a wastewater treatment plant, but it now falls under the same
category as an individual household septic tank. In 2010, it was estimated that their number reachedaround 1,255,000 to cover 6,3900,000 population equivalent.
In moving forward in the reconstruction, expansion and new implementations of wastewater treatment
facilities, in accordance with the Sewerage Catchment Strategy, it can be estimated that the activatedsludge process, or similar processes that can be easily modified to achieve advanced treatment, will
prevail. By doing so, septic tanks are gradually expected to decrease in urban areas.
Table 2: Classification of wastewater treatment facilities in Malay Peninsula (December 2008)
Wastewater Treatment Facilities
Quantity/Length
Population Equivalent (PE)Regional STPs (Public)

74

5,600,000

Multipoint STPs (Public)

5,148

12,300,000

Pumping Stations (PS)668

3,600,000

Private STPs

3,415*

2,000,000*

Communal Septic Tanks (CST)

3,635

434,000

1,100,000

5,500,000

761,000

3,800,000

Individual Septic Tanks (IST)
Pour flush (PF)Sludge Treatment Facilities (STF)

40－

Sewer Networks (km)*based on identified Private Plants

14, 000－

2)

Capacity of the wastewater treatment process

IWK reported the characteristics of raw wastewater as follows: 200 mg/L < BOD < 400 mg/L and 200
mg/L < SS < 350 mg/L.
Table 3 shows the relationship between treatment processes and the quality of treated wastewater.
Table 3: Relationship between treatment processes and the quality of treated wastewater
Treatment process
Effluent quality
BOD (mg/L)

SS (mg/L)

Activated sludge process or similar treatment process

10-30

15-40

Aerated lagoon

20-80

40-100Stabilization pond process

20-10030-150

Imhoff tank

50-15030-150Individual household septic tank150-200

50-100

20

50

50

100

Reference
Discharged effluent quality standards

Standard A

Standard B
Standard A applies to the upstream side of the water intake.
3)

Environmental standards for river water quality

In 1985, the Department of Environment classified the quality of river water into six classes. Table 4shows environmental standards on a class basis.

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Table 4: Environmental standards for the quality of river water

Parameters(Units)Classes
l

llA

llB

lll

lV

V

DO

mg/l

7

5-7

5-7

3-5

<3

<1

COD

mg/l

10

25

25

50

100

> 100

BOD

mg/l

1

3

3

6

12

> 12

Total Dissolved Solids

mg/l

500

1000

-

-

4000

-

Total Suspended Solids

mg/l

25

50

50

150

300

> 300

Faecal Caliform

counts/100 ml

10

100

400

5000

5000

-

Total Coliform

counts/100 ml

100

5000

5000

5000

5000

>500004)

Water quality standards for discharged wastewater

Tables 5 to 7 show quality standards for wastewater discharged from treatment facilities based on theEnvironmental Standards for Water Quality enforced in 2009.
Table 5 indicates quality standards for wastewater discharged from new treatment plants. Table 6
presents the standards permitted before January 1999 while Table 7 shows the standards defined afterJanuary 1999. As shown in Tables 5, 6, and 7, a stricter value applies to the facilities constructed recently.

Table 5: Quality standards for wastewater discharged from new treatment plants

10Table 6: Quality standards for wastewater discharged from treatment facilities approved
before January 1999

Table 7: Quality standards for wastewater discharged from treatment facilities approved after January
1999

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5)

Quality of river water

Malaysia has constructed a vast number of wastewater treatment plants and enforced quality standards
for river water and wastewater discharged from such facilities. However, as shown in the figure below,
the river water quality has degraded in recent years.

The number of clean rivers decreased from 334 nos. in 2008 to 306 nos. in 2009
The number of polluted rivers increased from 48 nos. in 2008 to 54 nos. in 2009
Water quality trend shows deterioration in 2008-2009. This partly caused by the stoppage of scheduled desludging carriedout by IWK pursuant to the enforcement of SPAN/WSIA Laws effective from 1st January 2008.

Figure 3: Trends in river water quality in Malaysia(4)

Sewerage finance in Malaysia

4.1) Sewerage charges
The accompanying table shows public utility charges in Malaysia, which are derived from collected data.
Utility type

Ringgit/house/month (1 ringgit  27 yen)

Drinking water

40

Electricity

80

Telephone

150

Wastewater

8 (1/5 that of drinking water and 1/10 that of electricity)4.2) IWK’s operation
Since 2000 when the government took over IWK’s operation, the collection ratio of sewerage charges
has officially increased from 65 to 85 percent. The citizens seem more satisfied with sewerage services,12

resulting in the indication of a stronger intention to pay the charge. Nevertheless, government’s financial
contribution to IWK is still important.
Formally, the government provides 10 percent of IWK’s budget and the remainder is covered by thesewerage charges. However, as the subsidies from the government are not sufficient to cover IWK’s
deficit, this organization makes a request for 300 million ringgit every year. Nonetheless, only about
one-third of the requested funds are provided to IWK. Few reasons can be put forward to explain why
the government needs to finance in such way IWK.
Firstly, sewerage charges are probably not collected as announced, which requires conducting PR
activities for letting the residents understand the necessity of good sanitation and for payment.
Secondly, sewerage charges are too low (the tariff will probably not be raised before any generalelection). In its wish to gradually reduce subsidies given to IWK, the government is considering new
strategies for increasing the collection ratio of sewerage charges and reducing operational expendituresfrom IWK. This is why IWK is now asked to only focus on the managerial aspects of wastewater
treatment facilities and no longer to invest for the development of new sewerage infrastructure. The
integration of water supply and sewerage services in a same bill will make possible to stop water supply
to home users who pay no sewerage charge. While the tariffs for sewerage services need to be raised,
IWK shall strive to reduce operation and maintenance costs.
(5)

Maintenance of Wastewater Treatment Facilities

Malaysia has 144 local governments, and wastewater treatment facilities under the control of 86 local
governments. These are maintained by IWK with 2,800 employees.
IWK collects sludge from 40 percent of more than 1.2 million septic tanks in Malaysia (2010), raises
resident’s awareness on sanitation and the importance of properly maintaining septic tanks through PR
and educational activities to encourage septic tanks owners/users to make requests and pay for regular
desludging service. IWK also puts efforts in environmental education and human resource training inneighboring countries, including Indonesia, Vietnam, and Philippines.
IWK’s income includes sewerage charges and desludging fees from septic tanks, but the former collection
ratio reaches probably only about 50 percent and sewerage charges have been left unchanged for the
past 17 years at a low standard. Accordingly, IWK carries on services while relying on subsidies from thegovernment.

3. GRANTS-IN-AID FROM OVERSEAS AID AGENCIES AND A TOUR OF WASTEWATER TREATMENT PLANTS
As of now, Malaysia has a per capita GDP of about US$8,300 (2010), which is already higher than the
GDP of other Southeast Asian countries, so support from overseas aid agencies including JICA are
reducing.
Japanese assistance to Malaysia in the past ten years includes a contract for the 18th yen-loan“Nationwide Wastewater Treatment Project” with an upper limit of about 48.5 billion yen between theJapan Bank for International Cooperation and the Malaysian government signed in March 2000.
The purposes of this project were to construct wastewater treatment plants in 13 locations to reduce thepollution load of wastewater by 90 percent and to let about 2.8 million residents benefit from theresulting facilities. Japanese companies (including a general constructor and a plant maker) won the13international tender. Some of the plants include advanced treatment equipment such as a denitrificator.
The JSC team took a tour of the following two plants, which were constructed through this project.
3.1

Bunus Centralized Sewage Treatment Plant (Kuala Lumpur)(1)

Outline of the plant• This plant upgraded from the conventional aerated lagoon process to the two-step inflow
nitrification and denitrification process. Presently, it covers a population of 352,000 people
equivalent and has an average throughput of 87,000 m3/day (250 L/person/day on average).
The former and latter will reach 800,000 people equivalent and 198,000 m3/day in the future.
• The planned quality of treated wastewater is as follows: BOD = 20 mg/L, SS = 40 mg/L, T-N =10 mg/L, and NH4-N = 2 mg/L.
• The plant has a disinfector but carries out no sterilization because of lack of legal
requirements. At the time of the visit, IWK declared that water is sterilized only when awater-derived infectious disease is found. Note that sterilization is mandatory in the case ofdrinking water.

(2)

Wastewater treatment process• The plant employs the two-step inflow nitrification and denitrification process (anoxic,
aerobic, anoxic and aerobic) to remove nitrogen. It includes eight water treatment lines. The
mean MLSS and planned HRT of the aerobic tank are 2,000 mg/L and 10 hours, respectively.
The HRT of the final sedimentation pond is 2 hours. The anoxic and aerobic tanks attain DO <0.5 mg/L and DO > 1.5 mg/L, respectively.

(3)

Sludge treatment process• For excess sludge, polymer is added. The mixture is concentrated with a drum-type thickener
to reduce SS to about 2-4 percent, early settled sludge with an SS of 2-3 percent is added, andthe mixture is methane-fermented in a middle-temperature digestion tank for 30 days.
The volume of biogas generated is 2,500 m3/day, and its CH4 content is 60-65 percent. All themethane gas is currently burned without effective use, but future gas power generation is
being investigated. Digested sludge is dewatered to reduce the moisture content to 82
percent and then landfilled.

3.2

Southern Klang Valley Sludge Treatment Plant (Klang Valley District, Selangor State)(1)

Outline of the plant• The plant was constructed to treat septage and wastewater from neighboring houses.
IWK dispatches six staffs to operate the plant, in addition to the staff in charge of sewer
maintenance and sludge extraction from septic tanks. IWK announces that the plant hascompleted the first-phase construction and will be expanded in the future. The current andfuture planned throughputs of wastewater are 5,400 m3/day and 16,000 m3/day, respectively.

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(2)

Septage treatment process• The treatment flow consists of discharging septage from a vacuum truck, filtering with acoarse screen, filtering with a fine screen, lifting septage with a screw pump, concentrating it
in a storage tank, dewatering it with a screw press (the moisture content of the cake is 80%),and disposing it in a landfill.
After dehydration and filtration, BOD is 5,000 mg/L. The site for disposal of the dewateredcake is owned by a private company.

(3)

Wastewater treatment process
The plant employs the three-step inflow nitrification and denitrification process.

In the Pantai Wastewater Treatment Plant, the stabilization pond will be renewed during thesecond-phase construction plan, following the first phase that was implemented with the aid of ODA.
Chinese companies provide part of the financial support and construction.

4. WATER SECTOR REFORMS IN MALAYSIA(1)

Problems in the water supply and sewerage sectors in Malaysia

1)Each state government operates the waterworks. The positive introduction of PPP (e.g.
purification plant building based on BOT) accelerated the construction of waterworks, resulting ina drinking water coverage of 100 percent. However, there are some problems: for example, thelow efficiency of the water supply management results in a high ratio of unaccounted-for water(35% in average). In addition, water charges are generally still low, enabling the coverage of themaintenance cost but not the facility construction cost. Therefore, many state operators borrowfunds from the government for plant construction, and the accumulated debts prevent efficiency
improvement. In addition, there are many failed PPP plans.

2)

Although the transfer of all sewerage assets to IWK for management and development resulted in
drastically increasing sewerage coverage throughout Malaysia, ineffective cost recovery due to the
low tariffs of sewerage charges and probably to their insufficient collection rate necessitates –even after IWK’s nationalization in 2000 – additional subsidies from the Federal Government.

3)

Separating the operation of water supply and sewerage makes it difficult to cut water supply as
one measure against the nonpayment of sewerage charges.

(2)

Structural reform of the Malaysian water supply and sewerage sectors

In 2006, the Parliament approved the Water Services Industry Act 2006 as a new law and theestablishment of National Water Service Commission (SPAN) as a regulatory body of water supply andsewerage sector. In 2008, the former was in effect and the latter started.
(Waterworks)
With the new law, each state government transfers its waterworks to PAAB, a government-owned asset
holding company, which leases these assets to state-by-state water operators (state-managed or privatecompany) licensed by SPAN. As a result, PAAB receives leasing fees. SPAN checks the operators for
15

performance according to its own key performance indicators. SPAN has the right to revoke the licensefrom operators who show unsatisfactory performance.
(Sewerage)
Concerning the sewerage, SSD transfers its regulatory function to SPAN. The former works as a project
implementation agency (managing funding for facility construction/renewal), the latter regulates them,and IWK maintains the facilities.
The structural reform of the Malaysian water supply and sewerage sectors aims at the following
objectives:
1)

To improve the efficiency of the operators. A new system has been introduced in which SPAN has
been established as a regulatory body for water supply and sewerage. With this system, theperformance of the operators is monitored according to key performance indicators defined by
SPAN.

2)

To separate asset possession and operation/maintenance in waterworks and sewerage, and to leta government-owned asset holding company control the assets to manage the investment for theconstruction of facilities. The federal government assumes debts for water services accumulatedby the local governments to reduce their load and to make the water utility more efficient. It also
introduces private funds in place of ODA and taxes into facility construction. The asset holding
company for drinking water has already started and the one for sewerage will be establishedwithin several years.

3)

To apply the same strategy to sewerage as waterworks, which are operated and maintained on astate level, IWK will be divided into state-by-state operators. Operation and maintenance of watersupply and sewerage services will be managed by a same company at the state level. Currently,
outside the states of Sabah and Sarawak, IWK monopolizes the operation and maintenance ofsewerage systems in urban areas except in Johor City. In the future, a principle of competition will
be introduced into the operation and maintenance field.

4)

Many residents pay no sewerage charge. The structural reform mentioned above aims to enable
the interruption of water supply as one of the measures against such issue through the integrationof waterworks and sewerage.

5)

To increase sewerage charges.

(3)

Impacts of the structural reform of the Malaysian water supply and sewerage sectors and PPP

In water utility, the introduction of past BOT-based PPP does apparently not result in the improvement of
the state-by-state operator’s efficiency.
Unaccounted-for water ratio is still high, and BOT companies in some states have realized a profit but thestate drinking water corporations suffer from deficit. In addition, there are many failed PPP projects.
Accordingly, the policy of the federal government does not approve new concessions. On the other hand,separating asset possession and operation and maintenance may allow private companies to join thelatter field easily.
In the wastewater treatment field, the structural reform mentioned above enables private companies tobe involved in the operation and maintenance of sewerage formerly monopolized by IWK. Actually inJohor City, Ranhill, a Malaysian private company, already operates and maintains the waterworks, and16the city government operates and maintains the sewerage, but the former hopes the latter work.
Therefore, the federal government has had an argument about whether to permit it. If Ranhill would beallowed for sewerage operation and maintenance, the same situation could occur in other states.
Foreign companies can conduct the operation and maintenance of water or sewerage facilities, but there
are restrictions on stockholding—not less than 70 percent their employees shall be Malaysian.

5. SEPTAGE MANAGEMENT IN MALAYSIA(1)Present state

To ensure that all buildings have a connection to a wastewater treatment system, each new
construction needs to obtain a certificate of fitness (CF) issued by the Sewerage Services Department(SSD) until 2008, and later by SPAN. This certification applies not only to wastewater treatment facilities
but also to waterworks, to ensure that all the facilities conform to Malaysian Guidelines.
Wastewater is now treated mainly by sewerage facilities, but many houses and communities have septic
tanks, from which sludge needs to be regularly collected. In 2010, Malaysia had 1.2 million individual
septic tanks and 4,300 communal septic tanks, which covered 6.4 million and 0.5 million populationequivalent, respectively. These figures keep growing as private developers are still providing individual
septic tanks with new constructions. There are currently 16 private companies licensed by SPAN to
manufacture septic tanks in Malaysia. In addition, the population equivalent using pour-flush toilets
reaches more than 4.4 million (about 15.8% of the total population).
In 1993, regular sludge extraction started when IWK was entrusted for sewerage services and septage
management. Before that, sludge was collected from only 2 percent (about 300,000 units) of the existing
septic tanks. To implement scheduled desludging by geographic area, IWK developed over several years a
database of septic tanks from field mapping and on-call desludging requests. This data is stored in asystem called “Customer Operational Enquiry and Desludging System (COEDS).” In this system, theCustomer Service Department of IWK informs the residents living in a specific area of when sludge is to
be extracted, and the users reply with a desired date. After sludge collection, a written work
confirmation is issued in which customers can evaluate the service received. A given fee shall be paid forscheduled desludging once every six months and for on-call desludging immediately after the work.
For a communal septic tank, the owner shall pay the desludging fee in the same fashion as individual
septic tanks. For individual premises or houses connected to a septic tank, the fee ranges from 2 to 6
ringgit/month. For on-call service (for example in areas not covered by the scheduled desludging
program), the fee is 180-360 ringgit (US$60-120), providing that the tank capacity does not exceed 2.5
m3.
IWK’s scheduled desludging program started and drastically increased the percentage of desludged
septic tanks from 2 percent of 302,800 units (1993) to 58 percent of 938,886 units (2001). However, only
about half of the septic tanks in the target areas participated in regular desludging until 2008. Gradually,an increasing number of tank owners showed unwillingness to pay the desludging fee and contacted asludge extractor only when their tanks had trouble. Although desludging is required by law, SSD and later
SPAN could not enforce it. As a result, the quality of river water is steadily degrading in recent years.
Figure 3 (presented before) shows trends in river water quality.
To tackle this issue, the government has adopted a new policy for desludging, while gradually increasing17

large-scale sewerage coverage to connect public sewerage to all existing small-scale systems. Since 1st
January 2008, it is no longer IWK’s responsibility to conduct scheduled desludging but the owner ofpremises with septic tanks to ensure that maintenance is done. Under the latest legal arrangement,
sludge must be collected once every three years either by IWK or a private contractor holding a permit
from SPAN. The tariff is regulated and must not exceed US$106 for a septic tank with a capacity of 2m 3.
This fee includes collection and treatment costs. If septic tanks are not desludged within three (3) years,
owners can be fined up to 50,000 Ringgit (about US$16,500). Under WSIA, the fines for non-compliance
have significantly been raised to oblige owners to comply with their desludging duty and pay forsewerage services in covered areas. Future plans aim for stricter enforcement measures when water andsewerage services will be integrated and managed by the same operator at state level.

6. WORKING ON THE IMPROVEMENT OF THE SEWERAGE SYSTEM(1)

Problems to be solved in the Malaysian sewerage system (including pending ones)
The hearing results show the current problems as follows:

(2)

1)

Making management more efficient(i)Centralizing sewerage systems(ii)
Increasing the ratio of sewerage charge collection(iii) Reviewing the organizational system

2)

Further improving water quality in public water bodies

Sewerage system to be proposed by Japan

In consideration of a rise in Malaysian GDP, an increase in future population, urbanization, measures forfurther improving the quality of water in public water bodies, and the promotion of centralized
treatment of wastewater from small-scale sewerage according to the sewerage catchment strategy, we
advise Malaysia to take measures for removing nitrogen and phosphorous in order to preserve water
quality. We also recommend promoting applications for reusing treated wastewater with membrane
separation technology in order to prevent water shortages.
Currently, Malaysia does not conduct enough investigation for the reuse of sludge and in somewastewater treatment plants, sludge is treated anaerobically (methane fermentation) but the resulting
biogas is only burned. We encourage Malaysia to work on biogas power generation for reusing resources
while centralizing small-scale sewerage. In addition, urbanization will require the reconsideration ofsludge disposal (dewatered cake) in landfills and further reduction of sludge.
From an institutional aspect, we think that Malaysia should introduce a system similar to Japan’s total
pollutant load regulation in order to improve water quality in public water bodies.

18

REFERENCES
A)

Sewerage Services Act approved by the Assembly in 1993
SEWERAGE SERVICES ACT 1993
http://www.agc.gov.my/Akta/Vol.%2011/Act%20508.pdf

B)

Water Services Industry Act approved by the Assembly in 2006 and enforced in 2008
WATER SERVICES INDUSTRY ACT 2006
http://www.agc.gov.my/Akta/Vol.%2014/Act%20655.pdf

SOURCES1)

Information on Malaysia provided by the Ministry of Foreign Affairs of Japan
http://www.mofa.go.jp/mofaj/area/malaysia/

2)

Datuk Ir. Abdul Kadir Mohd Din: “Transforming the Wastewater Industry- Malaysia’s Experience”,
2nd ADB－DMC and Partners Sanitation Dialogue, Manila, Philippines, 23 -25 May 20113)

Datuk Ir. Abdul Kadir Mohd Din and Ir. Mohd Haniffa Abdul Hamid: “Frontiers of Urban Sanitation
Solutions-Malaysia’s Sewerage Management”, 2nd IWA Development Congress & Exhibition,
Pioneering Water Solutions in Urbanising Areas, Kuala Lumpur, Malaysia, 21-24 November 2011

4)

IWA Water Wiki, Country: Malaysia, Project: Faecal Sludge Management - Malaysia
http://iwawaterwiki.org/xwiki/bin/view/Articles/Faecal+Sludge+Management+%252D+Malaysia

5)

Mohd Ridhuan, Ismail, National Water Services Commission, Malaysia, “Sanitation Policies &Initiatives in Malaysia”, ADBI-JSWA-JSC Regional Workshop on Sanitation in Asia-Pacific, 4-6
September 2011, Tokyo, Japan6)

Ir. Haniffa Hamid, Ir. Dorai Narayana & S. Anusuyah Bai (Indah Water Konsortium Sdn Bhd),“Centralized and Decentralized Wastewater Management in Malaysia – Experiences andChallenges (Part 1)”, Ingenieur, p.18-23, Vol. 42, June – August, 20097)

http://www.iwk.my/sewerage-fact.htm

8)

http://www.did.sarawak.gov.my/wqis/sgsarawak/water-qua-standard.htm

9)Department of Environment, Ministry of Natural Resources and Environment, “Environmental
Requirements: A Guide For Investors, Eleventh Edition, October 201010)

IWK material
http://web6.bernama.com/client/iwk/faq.php

11)Documents announced by the Embassy of Japan in Malaysia
http://www.my.emb-japan.go.jp/Japanese/bilateral/sewage/081202.html

12)

A Rapid Assessment of Septage Management in Asia, USAID, Eawag, WaterLinks. Country
Assessment, Malaysia, pp. 63-76., Jan. 2010.
http://pdf.usaid.gov/pdf_docs/PNADS118.pdf

13)

Malaysia Water Industry Guide 201114)

Progress on Sanitation and Drinking Water (2010 Update), WHO – UNICEF, p. 45

15)

Malaysia’s Sewerage Needs Integration, Asian Water, January/February 2008, p. 11

16)

Malaysia’s Water Vision: The Way Forward – The Malaysian Water Partnership.
http://www.fao.org/DOCREP/004/AB776E/ab776e02.htm

17)“Towards Sustainable Sewerage Development - Sharing Malaysia’s Experiences For Replication”,
by: Ir. Abd. Kadir Mohd. Din, CEO of IWK. 6th Ministerial Conference on Environment and19

Development in Asia and the Pacific (MCED-6), Asthana, Kazakhstan, 27 Sept. to 2 Oct. 2010.
http://www.unescap.org/mced6/side_events/documents/eeei/MCKadir-Malaysia.pdf
18)“Overview of the Water Services Industry in Malaysia”, by Mdm. Nor ‘Aini Abdul Wahab’, Deputy
Secretary - General (Green Technology and Water), Ministry of Energy, Green Technology andWater, Malaysia. Ministry of Land, Infrastructure, Transport and Tourism, Japan, 14 Feb. 2011.

19)

Malaysia, Achieving the Millennium Development Goals, Success and Challenges. United Nations
Country Team Malaysia, Economic Planning Unit, Prime Minister’s Department, Malaysia, p.
186-188 Jan. 2005.
http://www.epu.gov.my/html/themes/epu/images/common/pdf/publication/UNDP1.pdf

20)

Climate Change Country Profile: Malaysia, WHO.
http://www.wpro.who.int/NR/rdonlyres/3FB0A304-554E-4637-A3A0-3443036E56BC/0/MAA.pdf

21)

Water Supply and Sanitation in Malaysia, Wikipedia, the free encyclopedia.
http://en.wikipedia.org/wiki/Water_supply_and_sanitation_in_Malaysia

22)

Malaysia: Health Profile. WHO, 2011.
http://www.wpro.who.int/countries/maa/2011/

23)

Water and Sanitation Diseases and the Environment: Challenges, Interventions and Preventive
Measures, Scaling Up Sanitation: The Case of Malaysia, pp. 253-255. Janine M. H. Selendy.
Wiley-Blackwell, Horizon International.
http://books.google.co.jp/books?id=lOEzK5bqGP0C&pg=PA474&lpg=PA474&dq=Water+and+Sanit
ation+Diseases+and+the+Environment:+Challenges,+Interventions+and+Preventive+Measures,+Sc
aling+Up+Sanitation&source=bl&ots=_QeW6p9I04&sig=zWSlEkoyhmzGgp1RDZuAxje3M3k&hl=en&sa=X&ei=B4QrT7GSCuqZmQX73ujNDw&redir_esc=y#v=onepage&q=Water%20and%20Sanitatio
n%20Diseases%20and%20the%20Environment%3A%20Challenges%2C%20Interventions%20and%
20Preventive%20Measures%2C%20Scaling%20Up%20Sanitation&f=false

MEETINGS IN MALAYSIA
I)

Meeting with Mr. Engku Azman, Senior Deputy Director (Regulatory), Ministry of Health, Malaysia.
22 Nov. 2011.

II)

Meeting with Mohd Ridhuan Bin Ismail, Executive Director, SPAN, Malaysia. Oct, 22, 25 Nov. 2011.

III)

Meeting with Ahmad Budaya Bin Ismail, Senior Executive Communications Department, and Bazli
Bin Hamzah, Klang Sludge Treatment Plant Unit Manager, IWK, Malaysia. 24 Nov. 2011.

IV)

Meeting with Mr. Hamad Rozian, Ministry of Energy, Green Technology and Water, Malaysia. 25
Nov. 2011.

20