KUALA LUMPUR: Water supply disruption in the Klang Valley may result in economic losses of billions of ringgit because of decline in production, cost increases and productivity drops.
Many major industries such as manufacturing, tourism, food and healthcare will suffer losses as operations cannot run normally, thus affecting the daily business target set.
Failure to achieve the target, especially for manufacturers, will lead them to increase costs due to overtime operations to cover the affected production.
To illustrate, the UniKL Business School Dean, Associate Professor Dr Aimi Zulhazmi Abdul Rashid, said that if a disruption of water supply lasts for a month, it can affect the country's Gross Domestic Product (GDP) value of between 0.3 to 0.5 per cent based on the reduction of productivity and impact on various sectors including transportation.
(File pix) Many major industries such as manufacturing, tourism, food and healthcare will suffer losses as operations cannot run normally without water, thus affecting the daily business target set. Pix by Aizuddin Saad
"Continuous water supply disruption over a long period of time, especially to key national economies such as the Klang Valley, has a negative impact on productivity.
"In addition to affecting business operations and trading activities, it indirectly reduces investor confidence in the infrastructure available in Malaysia in general. If it continues,
it can affect the country's GDP growth, "he told NSTP when asked to comment on the impact of water supply disruption in the Klang Valley on the economy.
In general, the Klang Valley accounts for about 38 per cent of Malaysia's Gross Domestic Product (GDP) value in 2016 totaling RM1.23 trillion.
Based on estimates, if the issue lasts for a month, it is estimated that economic losses can reach over RM2 billion due to reduced productivity and impact to other sectors.
Meanwhile, Independent Analyst, Dr Hoo Ke Ping, said that water is a requirement for many industries and if water supply disruptions continue, it will affect industrial operations such as manufacturing, tourism, food and healthcare.
He said the launch of housing projects would also be delayed if water supply problems were not resolved properly.
"Many important industries are in the Klang Valley. Product production operations will be affected for industries that require a lot of water such as electricity and electronics, processing of food and so on.
"If water supply disruptions last longer than usual, it raises concerns and encourages companies to review plans to increase investment in the Klang Valley or review whether they need to continue operating here," he said.
(File pix) Water supply disruption in the Klang Valley may result in economic losses of billions of ringgit because of decline in production, cost increases and productivity drops. Pix by Saddam Yusoff
Apart from affecting industrial production operations, Hoo said the disruption of water supply over time has also caused other problems such as epidemics following the lack of clean water and this can affect the productivity of the population, especially those living in apartments.
Chairman of Kumpulan Pembuatan Makanan Persekutuan Pengilang Malaysia Datuk L Krishnan, said the latest disruption saw some companies already preparing with their own water supply system, but for a limited period of time.
"The state government has given reminder notices to companies willing to deal with this disruption. However, if the situation persists, the company will surely suffer losses, "he said. © New Straits Times Press (M) Bhd