Malaysia’s RM2 billion water leak: Why non-revenue water has become a national crisis

SHAH ALAM - Malaysia's persistent non-revenue water (NRW) problem, where an estimated 35 per cent of treated water is lost before reaching consumers, continues to expose deep structural weaknesses within the country’s water supply system.

With annual losses estimated at around RM2 billion, experts warn that the issue extends far beyond leaking pipes, affecting financial sustainability, resource management and long-term water security.

Former National Water Services Commission chairman Charles Santiago said the urgency to resolve NRW has become even greater due to climate change and worsening weather conditions such as El Nino, which place additional pressure on already strained water resources.

“Without intervention, treated water losses will continue to escalate, effectively resulting in large volumes of water being wasted underground,” he told Sinar Daily.

Water engineering expert from Universiti Putra Malaysia, Associate Professor Dr Syazwani Idrus explained that NRW refers to treated water that is produced but never billed due to leaks, faulty meters, illegal connections or untracked usage.

“As a key performance indicator, NRW reflects the efficiency of a water supply system by showing how much treated water is lost before reaching end users.

“Beyond its financial implications, it also has environmental consequences, as water treatment requires significant energy and resources.

“When treated water is lost, the energy used in its production is wasted, making NRW not only an economic issue but also an environmental concern linked to inefficient resource use and higher carbon emissions,” she said.

Malaysia’s NRW rate of about 35 per cent remains significantly higher than many international benchmarks.

Singapore records NRW levels of around five per cent, while Japan maintains rates as low as four per cent. Developed countries generally aim to keep NRW below 15 per cent.

According to Syazwani, one of the main causes behind Malaysia’s high NRW rate is ageing infrastructure, particularly old asbestos cement (AC) pipelines that have long exceeded their intended lifespan.

“Many of these pipes are now between 50 and 70 years old, far beyond their intended service life. Over time, these materials become increasingly fragile.

“Their structure deteriorates, making them more vulnerable to external pressure from soil movement, traffic loads and changes in ground moisture. This leads to frequent leaks and pipe bursts,” she said.

Experts estimate that roughly 39,000 km of pipelines nationwide require replacement.

Although the federal government has allocated RM2 billion for water infrastructure upgrades, observers say the amount remains insufficient given the scale of deterioration across the national distribution network.

Without major intervention, experts warn Malaysia risks remaining trapped in a cycle where leaking treated water drives the need for additional treatment capacity instead of strengthening long-term supply resilience.