FOR a significant period, the water system in Sabah has served as a critical resource for its residents, but it has also posed a consistent obstacle for the region.
Despite continuous efforts to enhance its infrastructure, challenges such as water supply disruptions, substantial non-revenue water (NRW) losses, and governance issues persist and attract public attention.
A pivotal question now arises for policymakers and the community: should the management of the water supply remain within the jurisdiction of the Sabah Water Department, or should the State consider the bold options of corporatisation or privatization of water services?
Additionally, in the event of such a transition, is the establishment of a Water Commission necessary to oversee and safeguard the welfare of consumers?
The Sabah Water Department, also known as Jabatan Air Negeri Sabah (Jans), has been responsible for supplying treated and safe water to residences, businesses, and establishments in the State since 1988.
Over the years, the department, led by various directors, has successfully expanded its water infrastructure and provided services to remote areas, overcoming the geographical challenges of the region.
Despite these accomplishments, persistent operational deficiencies have been noted. The corruption probes involving senior officials during 2015-2016 were a significant turning point, drawing attention to these issues.
Coupled with aging infrastructure and a high Non-Revenue Water (NRW) rate of approximately 57 per cent, one of the highest in Malaysia, the State Government has revealed intentions in 2025 to transform the department into a corporate entity as a strategy to enhance efficiency and transparency.
Maintaining direct state oversight of the department is crucial to uphold accountability to elected officials and prioritise social goals like rural access and subsidised rates.
This approach ensures that water services remain a public utility rather than driven by profit motives. Nonetheless, this system has drawbacks.
Administrative procedures can impede swift decision-making and procurement processes, and external political influences may interfere with professional administration.
Challenges also arise in recruiting and retaining skilled commercial and technical staff. Furthermore, lacking performance-based incentives often hinders efficiency enhancements.
To succeed, the existing framework necessitates robust governance reforms enforced by the government, including transparency, defined performance metrics, and independent audits. Otherwise, these challenges will persist despite any organisational rebranding.
Corporatisation presents a balanced approach by converting a government department into a state-owned enterprise governed by corporate regulations while remaining state-controlled.
This strategy instills business principles while upholding public ownership. Demonstrated successful in Malaysian regions like Negeri Sembilan and Johor, this framework prioritizes performance goals, operational efficiency, and customer satisfaction within corporatized entities.
This structure allows for increased managerial independence, expedited decision-making processes, recruitment of skilled professionals through competitive means, and enhanced financial transparency through regular audits and yearly financial disclosures.
However, corporatization alone cannot fix corruption or inefficiency. Without strong internal controls and an independent regulator, corporatised entities risk becoming state-owned monopolies with little transparency.
If Sabah proceeds with corporatisation, it should initially cover water distribution, billing, NRW reduction and customer service, while the State retains ownership of treatment plants and raw water assets.
Once systems mature, plant operations may later be transferred with appropriate oversight. Corporatisation is therefore the most practical route forward. It preserves public ownership but brings private-sector efficiency and accountability – provided governance reforms and oversight mechanisms are in place.
Privatisation, on the other hand, invites private companies to run water services under concession contracts. In theory, this can inject new capital and technology while transferring risk from the government. It can deliver efficiency through competitive performance contracts and access to international expertise.
However, privatisation carries its own set of risks. Private firms may prioritise profit over public welfare, potentially increasing tariffs or neglecting rural areas. Long-term concession contracts can also tie the State to inflexible arrangements.
Experience worldwide has shown that privatisation can succeed only if backed by a powerful, independent regulator to protect consumer interests and enforce service standards. Without this, privatisation could worsen inequality in access and affordability.
Regardless of which model is chosen, a Water Commission or regulatory body is essential. While Peninsular Malaysia is regulated by the National Water Services Commission (Span), Sabah’s constitutional autonomy over water means it can establish its own Sabah Water Commission.
This body should regulate tariffs and service quality, approve performance benchmarks, enforce transparency, and protect consumer interests. A regulator ensures that corporatised or privatised operators deliver value, not excuses. It acts as the guardian of fairness, quality and sustainability in the water sector.
Leadership will be key to any reform. Sabah’s next water leader must be a professional, not a politician – someone with engineering expertise, commercial acumen and an unblemished record of integrity.
Ideally, the chief executive should have prior experience in utility transformation, customer service improvement and water operations.
This is a position for a visionary technocrat who understands both the technical challenges of water supply and the sensitivities of public accountability. The board should include independent professionals, consumer representatives and financial experts to ensure checks and balances in every decision.
Since 1988, JANS has seen capable officers and some who fell short of expectations. Earlier directors spearheaded water expansion and rural coverage, yet systemic weaknesses in governance and procurement undermined progress.
The 2015 MACC probe was a painful but necessary wake-up call, reminding us that even the best engineers cannot deliver results without integrity and institutional discipline. The lesson is clear: structure matters, but leadership and accountability matter more.
Sabah stands at a critical juncture. Corporatisation offers the most balanced solution, merging the accountability of government ownership with the efficiency of corporate management.
Privatisation, while tempting for quick investment, should only be considered after strong regulatory safeguards are in place.
But whichever model is chosen, a Sabah Water Commission must be established to regulate performance, tariffs and consumer rights. Without it, reforms will only change names, not outcomes.
Most importantly, whichever government takes leadership of the State – whether today or in the future – it must support, strengthen, and sustain these reform plans.
Water reform should never become a political football. The people of Sabah deserve consistent leadership and a non-partisan commitment to ensuring clean, reliable, and affordable water supply.
Continuity in policy is the key to success; reforms must transcend politics and serve the long-term needs of the rakyat.
Water is not merely a commodity – it is a public trust. The people of Sabah deserve a transparent, efficient and sustainable water system that reflects that trust every single day.
