40 Performance Revi ew 02 Sect ion Ranhi ll Ut i l i t i es Berhad MANAGEMENT DI SCUSS ION & ANALYS I S OUTLOOK AND PROSPECTS - ENVIROMENT SECTOR With the continued upswing in economic activities, consumption demand for potable water, especially non-domestic consumption is expected to maintain its upward trajectory going into FY2023. Supported by rapid economic growth and influx of investments into Johor, the state economy should experience a significant recovery going forward. Among the economic highlights include the RM25 billion Ibrahim International Business District (“IIBD”). The project serves as a catalytic infrastructure development plan that will attract foreign and domestic investments through the establishment of new businesses. It will create jobs and spur local socio-economic multiplier effects such as improving accessibility and connectivity. Cumulatively, these positive developments will promote population growth as well as attract more industrial and commercial businesses into Johor. The Johor Bahru-Singapore Rapid Transit System (“RTS”) scheduled for completion by 2026 and the revival of the High-Speed Rail (“HSR”) also bodes well for the state. These rail projects will improve accessibility and connectivity, enhance logistics and facilitate the movement of people across the Causeway and from the west coast of peninsular Malaysia. The convenient travel mode and shorter travel times (compared to driving) will certainly spur increased business activities. All of the aforementioned allude to increased consumption demand for potable water. As consumption increases, the implementation of higher tariffs will further support revenues going forward. The revised tariffs have been long overdue and it is timely that the introduction comes amidst this juncture. The increases in water tariffs for non-domestic users range between 20 sen and 30 sen / Cu M or a 6-10% rise. At the same time, the minimum monthly charges for non-domestic users and special segments (which have minimum contributions to Ranhill SAJ’s total non-domestic billings) such as houses of worship, welfare institutions, and shipping have increased by 3%, 129%, and 40% increases respectively. Increased consumption coupled with revised tariffs will support the medium to long-term financial sustainability of the water business in the state. The revised tariffs are still comparatively lower than those charged in neighbouring Singapore and in many other Southeast Asian countries. The focus remains on reducing NRW levels going into FY2023. Ranhill SAJ aims to complete all five packages under Rehab 2018, Rehab 2019, and Rehab 2020 by FY2023. This will deliver a further NRW savings of 70 MLD by end FY2023. The implementation of Rehab 2021 in FY2023 will yield another 12 MLD of NRW savings. With this, the Group foresees qualifying for the Matching Grant Under Approach Two of the National NRW Program. Year Total Incoming Wastewater 2019 2020 2021 2022 Plant Volume (m3’000) Volume (m3’000) Volume (m3’000) Volume (m3’000) WWTP, Amata City Chonburi Industrial Estate 24 MLD 4,473.0 3,605.0 3,724.0 3,893.0 WWTP, Amata City Rayong Industrial Estate 9.6 MLD 2,996.0 2,588.0 2,881.0 3,139.0 WWTP, Amata City Rayong Industrial Estate 20 MLD 3,458.0 3,549.0 3,773.0 3,942.0 Asian Institute of Technology (“AIT”) 1.5 MLD 0.5 0.4 0.5 156 Total Wastewater (Incoming) 10,927.0 9,743.0 10,339.0 11,130.0 Total water sales from Thailand operations in FY2022 stood at THB188.85 million. FY2020 FY2021 FY2022 Water Sales (THB million) (THB million) (THB million) RWTT 27.62 30.99 31.46 AnuRAK 150.89 161.45 157.39 TOTAL (Thailand) 178.51 192.44 188.85 On 23 December 2022, the Group completed upgrading works on the Amata Rayong wastewater treatment plant (“WWTP”) P4 project and with this the Group’s total wastewater treatment capacity increased by 10% to stand at 54 MLD as at 31 December 2022. The increased capacity will ensure the operations in Amata Rayong and Chonburi are able to meet the increasing incoming volume of wastewater.
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