Corporatising Sabah Water Dept shouldn’t involve automatically absorbing concession agreements, says former director

KOTA KINABALU (Feb 20): The proposed corporatisation of Sabah Water Department will only succeed if the state is prepared to enforce the discipline, transparency, and professional governance required to secure reliable water supply for future generations, said Datuk Amarjit Singh.

When responding to Finance Minister Datuk Seri Panglima Masidi Manjun’s reform proposal, the former Sabah Water Department director said corporatisation deserves serious consideration, but warned that it must be anchored in strong governance, professional management, and clearly defined structural objectives.

“Reform must go beyond a mere change in administrative form and instead focus on accountability, technical performance, and long-term sustainability,” he said, describing corporatisation as a governance reform mechanism rather than a cosmetic restructuring exercise.

He explained that corporatisation should not be confused with privatisation.

“Under a corporatised model, the state government remains the sole owner, while management practices shift towards clear performance targets, financial discipline, and greater operational autonomy,” he said.

However, he cautioned that any corporatisation exercise must be carefully scoped and should not automatically absorb or restructure existing water concession arrangements such as Jetama Sdn Bhd, Timatch Sdn Bhd, and the Lahad Datu water supply concessions.

According to him, these agreements operate under separate contractual and legal frameworks as water producers or processors, not as water purveyors.

“Combining concession restructuring with departmental corporatisation could complicate reform efforts and delay progress,” Amarjit said, stressing that structural reform of the department should proceed independently, while concession agreements are reviewed separately under their existing terms “in the interest of good governance and transparency”.

He said Sabah’s water challenges extend beyond funding gaps, pointing to ageing infrastructure, high non-revenue water levels, and delayed asset renewal programmes.

“Bureaucratic constraints within a traditional departmental structure have slowed procurement processes and infrastructure upgrades.

“A properly governed corporatised model can introduce greater operational flexibility, measurable key performance indicators, and stronger asset lifecycle management,” he said, adding that leadership and governance would ultimately determine success.

He said corporatisation must not become a superficial rebranding exercise as strong engineering oversight, transparent financial controls, and merit-based appointments are essential.

He also proposed a hybrid leadership structure combining experienced internal technical officers with seasoned utility management professional to provide both continuity and reform momentum.

On financial sustainability, he said efficiency improvements should come first.

“Reducing non-revenue water and strengthening asset management must precede any consideration of tariff adjustments,” he said, adding that affordability must remain a guiding principle.

“Corporatisation is not a cure-all solution. It is a governance reform mechanism that can only succeed if supported by professionalism, accountability, and firm political commitment,” he added.