Threat to ‘throttle’ Sg Muda affects whole northern region: Penang water chief

GEORGE TOWN – The federal government should step in to prevent Kedah Menteri Besar Muhammad Sanusi Md Noor from taking “independent” actions that threaten water supply services in Penang, which is part of the Northern Corridor Economic Region (NCER).

Penang Water Supply Corporation (PBAPP) chief operating officer Datuk Jaseni Maidinsa, in a statement today, said existing federal and state laws define the rights of Penang and Kedah vis-a-vis Sg Muda.

“In the eyes of the law, the menteri besar has no legal standing to demand payment from Penang. There should be no doubt that if he had any grounds to demand payment, he would have taken Penang to court.

“Penang did not create the Sg Muda dispute. In fact, Penang has never questioned Kedah’s riparian rights to abstract water from Sg Muda. On the other hand, the menteri besar has been publicly threatening Penang to demand payment,” he said.

Jaseni said that, of late, the menteri besar has stirred up the “muddy waters” controversy by announcing new infrastructure projects in Kedah that he claims would “throttle” the availability of raw water from Sg Muda for Penang.

“Will the federal government allow the menteri besar to ‘independently’ jeopardise water supply security in Penang?

“If he is allowed to do so, the Penang government and PBAPP will have no choice but to initiate actions to defend water supply for 1.776 million people and all the businesses that operate in Penang at all costs,” he added.

The Penang government has stated that 163,000ha of rainforests in Ulu Muda, where the Sg Muda has its source, should not be exploited for quick but unsustainable gains. Instead, Ulu Muda should be properly conserved and legally protected as an irreplaceable raw water resource in the NCER.

“We have repeatedly mentioned that Ulu Muda collects raw water for three NCER states – that is Perlis, Kedah and Penang. As such, Ulu Muda must be regarded as an NCER issue.

“The negative socioeconomic impacts of Ulu Muda’s destruction (by logging and potential rare earth elements) mining will not only be felt in Penang, but in Perlis and Kedah as well.

“Socio-economic and Covid-19 recovery fallout from both social and economic standpoints, water supply for the people and all the businesses in Perlis, Kedah and Penang must always be prioritised above logging and REE mining. The reasoning is simple,” Jaseni added.

He said the well-being and welfare of the 4.2 million people in the three NCER states is more important than potential earnings or royalties from logging and REE mining.

The combined GDP contributions of Perlis, Kedah and Penang, estimated to be RM147.8 billion in 2019, is significantly more than revenue from logging and REE mining.

He added logging and potential mining in Ulu Muda will undermine water supply security in the NCER states.

Perlis, Kedah and Penang, like all other states in Malaysia, are striving to get on the road to recovery from the Covid-19 pandemic.

As such, a water crisis in the NCER at this point in time would quickly escalate to become a national health and economic crisis as well.

Federal revenue at risk

Jaseni also noted that Penang accounted for an estimated RM94.7 billion in GDP contributions  and an estimated RM10.5 billion in federal tax revenue in 2019.

“If Penang’s water supply is jeopardised, the people of Penang will suffer and the business operations, including that of the multinational corporations (MNCs), which have operated here for decades, will be affected.

“Accordingly, the federal government stands to lose billions in federal tax revenue, as well as potential foreign direct investments (FDI) if there is a water crisis in Penang.

“Moreover, if Ulu Muda and Sg Muda are compromised, the federal government also stands to lose billions more in federal tax revenue from Perlis and Kedah.” 

He described Kedah’s reluctance to seek RM100 million a year in compensation from the federal government as perplexing.

In 2019 alone, the federal government collected an estimated RM16.4 billion in tax revenue from Perlis, Kedah and Penang and yet, the menteri besar has not publicly sought compensation from Putrajaya for conserving and protecting Ulu Muda for the benefit of the three NCER states.

“Surely, the menteri besar is aware that a very high percentage of taxes paid by the people and businesses in Kedah are payable to the federal government,” Jaseni said. 

“The same federal tax scenario is applicable in Perlis and Penang.” – The Vibes, April 8, 2021