Financial Reform And Climate Resilience Key To Achieving AIR2040 - Fadillah

KUALA LUMPUR, Oct 14 (Bernama) -- An immediate financial reform and stronger climate resilience within Malaysia’s water sector is crucial to realising the Water Sector Transformation 2040 (AIR2040) agenda, said Deputy Prime Minister Datuk Seri Fadillah Yusof.

Fadillah, who is also the Minister of Energy Transition and Water Transformation (PETRA), stressed that current challenges such as financial strain, rising urban and industrial demand, and climate impacts must serve as catalysts for innovation, reform, and deeper collaboration across the sector.

He said financial reform must be treated as a national priority, calling for a fair and sustainable financing framework that balances public affordability with the financial strength of service providers.

"Tariffs must reflect the true cost of supply while ensuring that vulnerable groups are protected through transparent and targeted support mechanisms.

"Only with financial stability can utilities reinvest, innovate and build a water sector capable of meeting future demands,” he said in his keynote address at the 37th Malaysian Water Association (MWA) Annual Dinner and Awards Night, here tonight.

Fadillah also noted that Malaysia’s progress as a digital and industrial powerhouse has led to a surge in water demand from households and energy-intensive sectors.

To manage this, he urged the adoption of an integrated and data-driven approach that links water planning with industrial development, urban design, and environmental protection.

"Key strategies include stronger demand forecasting, efficient water use and diversification of supply sources through recycled water, rainwater harvesting, desalination and groundwater management," he said.

In addressing the growing climate and environmental pressures, Fadillah said Malaysia is already witnessing erratic rainfall patterns, prolonged droughts, and recurring floods that disrupt supply systems and livelihoods.

Hence, he called for increased investment in climate resilience, including the protection of water catchment areas, modernisation of infrastructure to withstand extreme weather, reduction of non-revenue water (NRW), and adoption of circular water practices such as reuse and recycling.

"These efforts must be supported by the integration of environmental stewardship and early warning systems into every level of planning," he added.

Fadillah emphasised that the success of the AIR2040 depends not only on government initiatives but also on a broad ecosystem of partnerships involving regulators, utilities, academia, and industry players.

"The Government, through PETRA, remains firmly committed to providing clear policy direction and supporting collaboration with state governments and agencies nationwide," he said.

Also present at the event were Chief Minister of Penang and Chairman of Perbadanan Bekalan Air Pulau Pinang Chow Kon Yeow, PETRA's Deputy Minister Akmal Nasrullah Mohd Nasir, and MWA's President Mohamad Hairi Basri.

-- BERNAMA