Malaysia Water Report Q1 2015
BMI View: This quarter, the forecasts for the Malaysian water sector have been substantially expanded,with added granularity, resulting in the revision of our existing forecasts. In particular, we now forecastwater extraction by source, and water losses. Overall, we take a positive view of the country's water sector,which benefits from large volumes of available water and a moderately strong project pipeline, offeringopportunities to infrastructure companies. However, supplies can vary from region to region, and this, inconjunction with an incoherent water management structure, can pose risks to water utilities companies, ascan the high levels of water losses and non revenue water consumption. Over the longer term, we expectthese risks to decrease following stronger legislation for tariffs and tariff payments, rising levels of watermeters and a stream of investment into distribution infrastructure. However, we would emphasise thatfinancing and project delays will continue to prove problematic for infrastructure and services groups alike.
Over 2015, we expect water to become an increasingly prominent issue, particularly in water-scarceSelangor. Voters in the region have stated that water is the most pressing and contentious issue, and blamethe regional government for causing the shortages due to project delays and political machinations. This isresulting in the government seeking to improve metering, reduce losses and non revenue consumption, andboost overall water availability and reliability.
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