How do temporary water supply accounts hide illegal water use?

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Temporary Water Supply Accounts Used to Conceal Illegal Water Tapping

Companies undertaking large-scale projects, often involving billions of ringgit, are exploiting temporary water supply accounts as a facade to illegally tap treated water, thereby circumventing legitimate licensing and incurring substantial losses for water operators. The National Water Services Commission (SPAN) annually identifies approximately 100 such cases, with a significant portion, around 40 per cent, proceeding to court. These illicit operations are frequently perpetrated by foreign entities seeking to maximise project profits by avoiding the costs associated with licensed water usage.
The Nature and Purpose of Temporary Water Supply Accounts

In the context of construction and large-scale development projects, temporary water supply accounts are established to provide a legal and metered source of water for a defined period. These accounts are typically set up to cover the duration of the project, ensuring that water usage for activities such as dust suppression, concrete mixing, and site facilities is accounted for. Legitimate accounts are provisioned with the understanding that water consumption will be monitored and billed accordingly, reflecting the actual usage over the project's timeline.
Mechanisms of Illegal Tapping Under Account Guises

The scheme involves companies applying for temporary water supply accounts but then proceeding to illegally tap into the treated water network without proper authorisation or a licence. This is often achieved by establishing discreet, unmetered connections that draw water directly from the main supply lines. The illusion of legitimate usage is maintained by keeping the official temporary account active, which may show minimal or negligible billing, often in the range of a few hundred ringgit monthly. This discrepancy between the low billed amount and the high actual water consumption at a busy project site serves as a primary indicator for detection by water authorities.
Financial and Operational Impact of Water Theft

The financial repercussions for water operators are considerable, with losses ranging from tens of thousands to as much as RM500,000 per incident. Beyond direct financial loss, this illegal activity can lead to indirect consequences, including potential disruptions to the water supply for other legitimate consumers. SPAN has responded by intensifying its enforcement efforts and enacting amendments to the Water Services Industry Act, which, effective March 15, 2025, stipulates significantly harsher penalties, including fines up to RM1 million and imprisonment up to 10 years, a substantial increase from the previous maximum fine of RM100,000 and one-year jail term.

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How do temporary water supply accounts hide illegal water use?

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