Tags: Malaysia | drought

Water Rationing Begins Outside Malaysia's Capital Amid Drought

Image: Water Rationing Begins Outside Malaysia's Capital Amid Drought Residents queue to collect water in Balakong, outside Kuala Lumpur.

Monday, 24 Feb 2014 10:59 PM

 

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Water rationing began in areas surrounding Malaysia’s capital after prolonged drought, as Selangor state officials sought to wrap up talks to nationalize the industry in the area.

“The supply of raw water in Selangor state is in a critical condition,” Khalid Ibrahim, the state’s chief minister, said in a faxed statement late yesterday. “The water levels at a few dams have been shrinking to reach an alarming stage.”

Rationing may also start in parts of Negeri Sembilan, south of Kuala Lumpur, if there is no rain in coming days, the New Straits Times reported today, citing the state’s Chief Minister Mohamad Hasan. Several other states have also reported shortages. Prime Minister Najib Razak is due to discuss potential responses to the situation, including cloud-seeding, at his weekly cabinet meeting tomorrow, the official Bernama news service said.

Opposition-controlled Selangor, which surrounds Kuala Lumpur, has been trying to nationalize water treatment assets in its jurisdiction for years to restructure the industry and tackle periodic shortages. Malaysia’s state and national governments want to announce a final resolution to the buyout within two weeks, Selangor’s chief minister said Feb. 18.

The regional government offered companies including Gamuda Bhd. a combined 9.7 billion ringgit ($3 billion) for their assets in December, Sharizan Rosely, an analyst at CIMB Group Holdings Bhd., wrote in a Jan. 10 report. Kumpulan Perangsang Selangor Bhd. and Puncak Niaga Holdings Bhd. are also being asked to sell.

Malaysia’s palm oil, cocoa and rubber-tapping industries are dependent on rainfall. Crude palm oil prices were little changed at 2,740 ringgit per metric ton as of 11:12 a.m. in Kuala Lumpur, according to data compiled by Bloomberg.

“Palm oil output may be affected,” Yeah Kim Leng, chief economist at RAM Holdings Bhd., said in a phone interview from Kuala Lumpur. “You may see a drop in fresh fruit bunches output in the first quarter. If the drought continues past March, then we might have to deal with more severe rationing that could possibly have an impact on our GDP.”

Residents in parts of Selangor will get water on alternate days and rationing will continue until the end of March if hot weather continues as predicted by the meteorology department, the chief minister said. The government will evaluate the situation before deciding on whether to declare an emergency, Bernama reported on Feb. 21, citing Najib.

Neighboring Singapore had a record 27 consecutive days of dry weather from Jan. 13, the country’s National Environment Agency said. The rain shortage may extend into the first half of March, it said in a statement.

© Copyright 2014 Bloomberg News. All rights reserved.

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