OCT 26 — Prime Minister Datuk Seri Najib Razak yesterday handed down the Federal budget 2014. This is a response by AWER, the Association of Water and Energy Research Malaysia.

1. Goods and Sales Tax (GST)

Implementation of GST for electricity must be reviewed by the government. This is due to the Power Purchase Agreement (PPAs) cost component for First and Second Generation Independent Power Producers (IPPs) is still part of the current tariff.

Based on discussion with the Energy Commission (ST) recently, ST would not carry out any renegotiation of second-generation PPA. Renegotiation of first-generation PPAs started in year 2007 and failed miserably in reducing the actual impact of PPA to electricity tariff.

First-generation PPAs (except those who got extension) will be ending by 2016. The second-generation PPAs will be ending between 2020 and 2024. In the meantime, ST must implement transparent tariff setting with involvement of all stakeholders.

AWER has given ST and the Ministry of Energy, Green Technology and Water (KeTTHA) numerous suggestions on improvements for tariff setting and improvements on the national electricity industry since 2011.

 2. Reallocation of energy use in transportation sector

AWER welcomes the implementation of public transport projects that will contribute positively to the reallocation of energy use (energy source). This is because the shift from personal vehicle usage to public transport can only be accelerated by an integrated public transport network.

AWER urges the government to develop a long-term public transport plan to ensure planned development of public transport with detailed targets. At the same time, AWER urges the government to implement the Minimum Energy Performance Standard (MEPS) and mandatory energy efficiency labelling for vehicles for both personal and commercial use.

This labelling mechanism will enable the purchase of fuel-efficient vehicles, which will help to reduce fuel consumption and become more environmentally friendly. This will also help stages of the fuel subsidy rationalisation programme.

3. Treated water reserve margin less than 20 per cent nationwide

An allocation of RM1.2 billion is only a short-term measure to help to develop water services infrastructures. KeTTHA has delayed the implementation of the National Water Services Industry Restructuring (NWSIR), which should have been completed during the 9th Malaysia Plan (2010).

Early this year, AWER met with KeTTHA’s Secretary-General to discuss some of the problems related to water services industry including delays in NWSIR, which is already three years late. KeTTHA agreed to complete NWSIR by the end of 2013.

If KeTTHA fails to implement this, strict action must be taken on all the KeTTHA officers involved in the delay of NWSIR implementation because they have caused additional expense to the government and disrupted national water security.

A special committee to monitor the treated water supply situation in Selangor and Kuala Lumpur must be established immediately to ensure sufficient supply of treated water in the Klang Valley during Visit Malaysia Year 2014.

According to a study by AWER, the people of Kelantan have to rely on groundwater through wells and tube wells. The level of water quality is still in doubt and they have to spend more than RM600 to build their own wells, or more than RM1,400 to install tube wells. We urge both the Federal Government and the State Government to expedite the implementation of NWSIR to ensure water service to the people of Kelantan are not neglected.

4. Investment tax allowance and tax exemption for green technology

This is to increase the use of green technology and directly reduce impacts on the environment. At the same time, investment allowances and tax exemptions should be evaluated and certified so that no irregularities occur. Too many so-called “green” technology projects have been mushrooming.

This is also to prevent businesses from being fooled by “green” claims.

5. Malaysian Green Foundation (Yayasan Hijau Malaysia)

KeTTHA already has three redundant agencies, and now add another one in this budget. Green Technology Corporation (Green Tech Corp), which was inaugurated by the Prime Minister himself in 2009, is the agency that should be carrying out the duties of the overall promotion of green technology. Green Tech Corp also has a workforce and a well-equipped office.

AWER hopes that the establishment of the Malaysian Green Foundation is cancelled to avoid too many agencies that do not function, and waste public money. Three other agencies that should be abolished are the Department of Water Supply, Sewerage Services Department, and Sustainable Energy Development Authority (SEDA).

All their tasks can be executed by the National Water Services Commission (SPAN), the Energy Commission (EC), Pengurusan Aset Air berhad (PAAB), Indah Water Konsortium (IWK) and water companies across the country respectively.

6. Cameron Highlands tragedy and water catchment areas management

Land use management plays an important role in water catchment management. The Cameron Highlands tragedy could have been avoided and it is not a natural occurrence.

Clearing of the upstream area of the dam is rampant, and management downstream from the dam are two factors that have a high possibility to be the main cause of this tragedy. The government must take action against those individuals or entities responsible for rampant clearing upstream.

AWER also sent a memorandum to all heads of state government and federal agencies after the last elections emphasising the importance to gazette and protect the water catchment areas. Are we going to wait for a tragedy involving the deaths of thousands of people or a severe water crisis to start protecting water catchment and highlands in Malaysia?

State governments have been given until 2015 to gazette their water catchments and protect them.

7. Energy efficiency in government operation

AWER welcomes the government’s decision to begin to audit the use of electricity and retrofit to improve the energy efficiency of operations. AWER hopes the Ministry of Finance (MoF) is not cheated by millions of saving promised by any agencies or entities, if all existing lights changed to LED lights.

Try driving on the Federal Highway in Petaling Jaya and compare the brightness of ordinary street lights and LED street lights. You can see a huge difference. LED lighting installation cost is not a low investment too.

Government must implement no-investment initiatives immediately. No-investment initiatives are directly related to behaviour patterns, consumption pattern and simple adjustment to daily operations. Low-investment initiatives are those that involve changing of equipments, electricity wiring redesigning to introduce zoning (lighting), changing of glass panels, etc. Saving from both the initiatives (no investment and low investment) can be used by the government later on.

Government must also prevent using Energy Performance Contracting method as suggested by KeTTHA previously. At the same time, all ministries and its agencies are welcomed to use the online calculator developed by AWER to carry out simple and free energy audit via www.click.org.my. The calculator is developed for all categories of electricity consumers.

Conclusion

All the comments are to enhance Budget 2014 and continue to improve environmental protection as well as achieving both water and energy security in Malaysia. AWER hopes the Prime Minister, who is also finance minister will carry out necessary amendments for budget 2014 in the current parliament session.

* Piarapakaran S. is president of AWER.

** This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.