UNIVERSITI TEKNOLOGI MARA

Faculty of Civil Engineering

Universiti Teknology MARA
40450 Shah Alam

SEMESTER : Mac – Jul 2021

LECTURER : DR ZADARIANA JAMIL @ OSMAN

RESEARCH TITLE : A Study on the Factors of Consumer Preferences for Domestic Water

Services in Pasir Puteh, Kelantan

NAME : NURUL NABILAH BINTI MOKTAR

STUDENT ID : 2018298246

FINAL PROJECT
RESEARCH
METHODOLOGY (ECC563)

Learning Outcomes:
1. By completing this project, students should be able to prepare a research proposal
related to the selected topic. (CO2, PO3)
2. By completing this project students should be able to display competency in presenting
the proposal in slides and writing a proposal. (CO3, PO12)
CO2: Critically prepare the literature review PO3: Design solutions for complex civil
and design experimental procedure to solve engineering problems and design systems,
research problem. components or processes that meet specified
CO3: Prepare a research proposal related to needs with appropriate consideration for
the selected topic. public health and safety, cultural, societal, and
environmental considerations.
PO12: Recognize the need for, and have the
preparation and ability to engage in
independent and life-long learning in the
broadest context of technological change.
 UNIVERSITI TEKNOLOGI MARA
Faculty of Civil Engineering
Universiti Teknology MARA
40450 Shah Alam

PROJECT TITLE: A Study on the Factors of Consumer Preferences for Domestic Water Services in

Pasir Puteh, Kelantan

REPORT Weightage Marks

WRITING
(CO2-PO3)
Research Background 5 1 2 3 4 5
Problem Statement 5 1 2 3 4 5
Objectives 5 1 2 3 4 5
Significance of Study 5 1 2 3 4 5
Scope and limitations 5 1 2 3 4 5
Literature Review 15 3 6 9 12 15
Methodology 15 3 6 9 12 15
Timeline/Gantt chart 5 1 2 3 4 5
Expected Results 15 3 6 9 12 15
Conclusion 10 2 4 6 8 10
Bibliography 5 1 2 3 4 5
Writing Skills 10 2 4 6 8 10
Sub-Total 100

A. Sub-Total marks A= A* = x 0.40 =

PRESENTATION Weightage Marks

(CO3-PO12)
Content 5 1 2 3 4 5
Slide Creation 5 1 2 3 4 5
Picture, Clip Arts & Background 5 1 2 3 4 5
Mechanics 5 1 2 3 4 5
Sub-Total 20

B. Sub-Total marks B= B* = x 0.10 =

Total Marks (50%) = (A*) + (B*) =

 TABLE OF CONTENTS

ABSTRACT.................................................................................................................................................................. i
1.0 INTRODUCTION...........................................................................................................................................1
1.1 BACKGROUND OF STUDY.....................................................................................................................1
1.2 PROBLEM STATEMENT.........................................................................................................................1
1.3 OBJECTIVES..............................................................................................................................................1
1.4 SIGNIFICANCE OF STUDY.....................................................................................................................2
1.5 SCOPE AND LIMITATIONS....................................................................................................................2
2.0 LITERATURE REVIEW...............................................................................................................................3
2.1 Introduction.................................................................................................................................................3
2.2 Low Coverage Performance, Dirty Water Supply and Frequent Unscheduled Interruption................3
2.3 Low Water Tariff to Cover Full Cost of Investment, Operation and Maintenance of Water Supply...4
2.4 Low Quality of Tapped Water Due to the Poorly Maintained Treatment Plants...................................4
3.0 METHODOLOGY..........................................................................................................................................5
4.0 EXPECTED RESULTS AND CONCLUSION.............................................................................................6
4.1 EXPECTED RESULTS..............................................................................................................................6
4.2 CONCLUSION............................................................................................................................................6
REFERENCES
GANTT CHART
 ABSTRACT

This study aims to investigate on factors of consumer preferences for domestic

water services in Pasir Puteh, Kelantan. Water is basic need in daily life, hence, a well-quality
of water services is a need to ensure the smoothness of people’s daily routine. The problem in
water sector in Kelantan especially in Pasir Puteh have threatened people’s daily routine such
as water disruption, water leakage, smelly and dirty water supply. These poor water services is
due to the poor efficient water pricing where services improvement could not be done as it is
required high cost in its operation. Excellent water services will give consumer’s confidence to
consume the water but poor services may endanger the households in many aspects and may
tarnish the water company’s reputation. Low water price may limit the water services
improvement and upgrading projects. The new water price can be recommended for any
improvement and upgraded services to high standard in services in the future which is
satisfying consumer’s needs. The level of attribution services of domestic water services also
caused the poor water services. An evaluation on water services attribution can be done to
assessed the quality of domestic water services and ensure the services are following the
guidelines and satisfied the consumers as they pay an appropriate water pricing in order to
consume an excellent water services. The outcomes of this study will form a new appropriate
water pricing with excellent services quality based on consumers’ preferences and to improve
and enhance current domestic water services to a better level in the future.

i
1.0 INTRODUCTION

1.1 BACKGROUND OF STUDY

Poor water services in Kelantan have been the main issue and have disrupted people's
daily routine for decades. This problem arises as there is no service improvement in water
utilities as it is would be valuable to the consumers. Excellent water services will give
consumers the confidence to consume the water but poor services may endanger the
households in many aspects and may tarnish the water company’s reputation. Low water price
affects the opportunity of the development of efficient water services in the state. Consumers'
preferences in water services depend on the water pricing, attribution of water services and
efficiency of water services (Kamaluddin et al., 2016). This study is conducted at Pasir Puteh,
Kelantan where this district is suffering from poor water services such as water disruption and
dirty water supply. This study is about to investigate the factors of consumer preferences for
domestic water services and propose an alternative solution for services improvement to
satisfying consumer’s needs. Planning management and investments and proposing new water
prices concerning the consumer willingness to pay (WTP) are necessary to increase the
efficiency of water services (Kamaluddin et al., 2016).

1.2 PROBLEM STATEMENT

a) Most of water sources come from the groundwater and groundwater utilization is most
significantly there. Nevertheless, the ground water is faced with problem such as over
extraction, subsidence and contamination. Some cases in Kelantan with low coverage
performance, dirty water supply and frequent unscheduled interruption.
b) Water tariffs seem too cheap and it is unable to generate enough revenue to cover the full
cost of capital investment, operation and maintenance. If the price is too low, the water
company will be unable to maintain and sustain its operation and if the price of water is too
cheap it leads to water wastage.
c) The delivery system of water supply is extremely bad and consumers are affected by water
shortage, especially those who are located in rural areas. The treatment plants are also
poorly maintained which can be seen through the outflow of low quality tapped water.

1.3 OBJECTIVES

a) To investigate the factor that influence consumer preferences for domestic water services
in Pasir Puteh, Kelantan.
b) To determine efficient water pricing for water services based on consumers preference in
Pasir Puteh, Kelantan.

1
 c) To evaluate water services attribution in Pasir Puteh, Kelantan.

1.4 SIGNIFICANCE OF STUDY

High rapid population and urbanization has increased the demand for water and is
expected to undergo substantial changes in the future. Water companies should manage the
problem quickly in order to satisfy consumers’ needs. However, low water prices can limit
water companies’ ability to enhance their service quality and cover their capital costs. The
identified strength and weakness of market demand in the water industry in this study helps to
improve quality, quantity and coverage area with a new standard for key performance. A clear
guideline for policy makers can be gained to achieve their economic targets without disturbing
long term economic prospects.

1.5 SCOPE AND LIMITATIONS

This study has limitations. This study is conducted in Pasir Puteh, Kelantan. This study
will focus on observation and investigation of domestic water services attribution and factors of
consumer preferences for domestic water services in Pasir Puteh, Kelantan. However, due to
the Movement Control Order (MCO) that has been implied by government to combat with
Covid-19, this study need to conduct through online. Therefore, the data obtained in this study
is limited. A deep and proper study should be conducted in the future for a better results and
data. A site investigation should be done in order to gain the accurate data.

2
2.0 LITERATURE REVIEW

2.1 Introduction

This study on the factors of consumer preferences for domestic water services was
conducted in Pasir Puteh, Kelantan. Kelantan was selected as the study region due to the
widespread use of wells by locals to obtain groundwater resources. Pasir Puteh district is
one of 10 in Kelantan and is adjacent to Bachok, Kota Bharu and Machang districts as
shown in Figure 1. Pasir Puteh’s area of 433.80 sq km comprises eight sub-districts, with
current land use including agricultural (81.97 per cent of the total district area),
residential (0.4%), industrial (0.3%), business (0.02%), government (2.8%) and forest
(14.51%) (Majlis Daerah Pasir Puteh, 2018). Issues regarding the problem in water
services in Kelantan is a debating issues due to the failure of supplying company in
provided the excellent water services to their consumers. Air Kelantan Sdn. Bhd. (AKSB)
is a sole provider that supplied water services in Kelantan until now. According to
Kamaluddin et. al (2013), the water service in Kelantan was privatized in October 1995
and before this it was under the Water Supply Division, Public Works Department. The
situation of the water supply was very bad and it was not keeping pace with the demand,
causing consumer dissatisfaction until the industry was privatized. The company operates
in ten districts which are Kota Bharu, Bachok, Pasir Puteh, Pasir Mas, Tanah Merah, Jeli,
Tumpat, Machang, Kuala Krai and Gua Musang. However, the poor water services in
Kelantan especially in Pasir Puteh District has not been solved for years and this situation
has threaten the consumers’ daily life as clean water is an essential need. According to
Hashim (2019), due to this situation, most of people use groundwater sources such as
well and boring in order to get clear water themselves as the services provided them
smelly and dirty water supply and sometimes water disruption and water leakage
occurred.

2.2 Low Coverage Performance, Dirty Water Supply and Frequent Unscheduled
Interruption.

Water crisis that currently occurred in Kelantan especially in Pasir Puteh are low
quality water supply, dirty water supply and frequent unscheduled interruption. In
Kelantan, water sources are 60% from surface water and 40% from groundwater to meet
their public needs (Kamaluddin et. al, 2016). The low coverage performance of the water
services provided by Air Kelantan Sdn. Bhd. (AKSB) can be seen when only 57% of the
population has access to water supply in 2010. About half of the population is taking
advantage of rich groundwater alluvial basin particularly in the north of Kelantan.
According to Kamaluddin et. al (2016), continuous reliability on non-treated water supply
imposes health risk to people in Kelantan. Moreover, it denies basic human rights to
water. People require excellent quality of water as it is an essential need in life.

3
2.3 Low Water Tariff to Cover Full Cost of Investment, Operation and Maintenance of
Water Supply.

Most of people in Kelantan complaint about the quality of water supply which is
not up to the standard, due to its condition, smelly and colored water supply. Currently,
water pricing in Kelantan is too low and it is unable to generate enough revenue to cover
the full cost of capital investment, operation and maintenance. According to Kamaluddin
et. al (2016), Kelantan ranked 3rd in 2011 as a state with lowest water prices for domestic
water services as RM0.55 applied for first 35 m3. Pasir Puteh District can be categorized
as developing and urban district as the population there has increased. Therefore, the
demand of water also increased and is expected to undergo substantial changes in the
future. Water companies should manage the problem as soon as possible in order to
satisfy consumer’s needs. However, the low water prices can limit water companies’
ability to enhance their service quality and cover their capital costs. Failing to meet water
supply demand is putting pressure on consumers. Thus solutions in dealing with water
shortages are needed. Therefore, before developing and upgrading the water services, the
most important step is to get know how much consumers are willing to pay (WTP) for the
services (Kamaluddin et. al, 2013). WTP describes the maximum amount consumers are
willing to give up for certain benefits in exchange for others, rather than without having
it.

2.4 Low Quality of Tapped Water Due to the Poorly Maintained Treatment Plants

Low quality supply water supply by Air Kelantan Sdn. Bhd. (AKSB) is due to the
poorly maintenance treatment plants. Poorly maintenance by water company resulted to
the dirty water supply and frequent unscheduled interruption. This situation has cycled
over years due to the low water pricing. Facing this situation, residents in Kelantan use
water sources come from groundwater and groundwater utilization is most significantly
in Kelantan. According to Kamaluddin et. al (2013), Kelantan currently lacks financial
sources in order to improve their water supply coverage to serve the public. Therefore, a
proper treatment plants’ maintenance can be done by proposing an appropriate water
price so that the total cost of maintenance can be covered. The proposed water price
should be taking account consumers’ preference in water services such as offering good
quality of water services with relevant price.

4
 3.0 METHODOLOGY

OBJECTIVE 1: INFLUENCE FACTORS OF CONSUMER PREFERENCES FOR WATER

DOMESTIC SERVICES IN PASIR PUTEH.
SURVEY DESIGN AND IMPLEMENTATION
- Constructing the questionnaires related to the policies implemented in water
industry and their conditions in Kelantan.
- Interview the expertise and officers in Air Kelantan Sdn. Bhd. (AKSB)
regarding the attributes, level of attributes and methods.
- Questionnaires distribution to the people in Pasir Puteh District.

DATA ANALYSIS
- Obtain data from returned survey data.
- Analyze survey results and conclude the criteria of water domestic services
based on consumer preferences.

OBJECTIVE 2: DETERMINATION OF EFFICIENT

WATER PRICING FOR WATER SERVICES.

PROPOSAL OF WATER PRICING

OBJECTIVE 3: EVALUATION OF
- Modelling appropriate water pricing for water WATER SERVICES
services according to the consumers’ preferred ATTRIBUTION IN PASIR
criteria of water domestic services. SITE INVESTIGATION
PUTEH.
- Obtain data by observing the water quality and
water services in site.
- Conduct an interview with several local people
SURVEY DESIGN AND IMPLEMENTATION
and officers in Air Kelantan Sdn. Bhd.
- Forming questionnaire regarding the consumers’ (AKSB).
willingness to pay the proposed water pricing.
- Questionnaire distribution to the people in Pasir
Puteh District. SURVEY DESIGN AND IMPLEMENTATION
- Construct a questionnaire regarding to an
evaluation of water services attribution in Pasir
DATA ANALYSIS Puteh.
- Obtain data from returned survey data. - Questionnaire distribution to local people in
Pasir Puteh.
- Analyze and evaluate selected water pricing of
water services based on consumers’ willingness
to pay.
COMPARE DATA
- Compare data obtained from survey and site
investigation.
- Conclude the level of attribution services of
water services in Pasir Puteh.

5
4.0 EXPECTED RESULTS AND CONCLUSION

4.1 EXPECTED RESULTS

From this study, it is expected that the factors of consumers’ preferences on domestic
water services in Pasir Puteh, Kelantan are water pricing and water services quality. New
proposed water pricing for water services chosen by consumers based on their preferences
and willingness to pay is expected to be RM 0.63 – RM 0.66.

Table 1: Proposed Water Pricing and Consumers’ Willingness to Pay

Willingness to Pay
Price Bid Total
Yes No
RM 0.61
RM 0.63 X
RM 0.66 X
RM 0.69
RM 0.72

The level of attribution services of domestic water services in Pasir Puteh is

expected to be poor quality services. Poor water quality can be seen through the water
disruption, water leakage, smelly and dirty water supply. This is because due to the
existed water pricing is low and insufficient to perform a maintenance for water services.
The comparison data from survey and site investigation also will prove the bad services
provided by domestic water services in Pasir Putih District. Hence, this situation shows
that domestic water services need an improvement where a new proposed water pricing
should be implied.

4.2 CONCLUSION

A domestic water service should provide an excellent water services with a

relevant water price to the consumers. The consumers tend to choose a service that offer
them more benefit with suitable price. As conclusion, in order to obtain this win-win
situation, it requires major changes in planning management and investments from both
sides. Apart from that, the government should also facilitate the water company by giving
subsidies to cover the high cost of production. Since water is considered as a ‘public
good’, it should be allocated to the consumers in the best condition. By granting subsidies
to the water company, the services provided by the company can be improved without
effect of price increases. Hence, the consumers will receive a good quality water services
without spending more money as the government provides subsidies. Households will be
aware to conserve water and avoid water wastage if prices are increasing.

6
REFERENCES

Kamaludin, M., Radam A. & Rahim K. A. (2016). Household Preferences for Improved Water
Services in Kelantan, Malaysia: A Choice Experiment Approach. Journal of Business and
Social Development, Vol. 4 (1), pp 43-54.

Kamaludin, M., Radam A. & Rahim K. A. (2013). Assessing Consumer’s Willingness to Pay for
Improving Domestic Water Services in Kelantan, Malaysia. Proc. of the 5th International
Conference on Humanities and Social Sciences. Songkla: Faculty of Liberal Arts, Prince of
Songkla University. pp 158-172.

Hashim, M., Nor, S. S. M., Nayan, N., Mahat, H., Saleh, Y., See, K. L. & Norkhaidi, S. B. (2019).
Analysis of Well Water Quality in the District of Pasir Puteh, Kelantan, Malaysia. OP
Conference Series Earth and Environmental Science. Vol 286.

Majlis Daerah Pasir Puteh. (2018). Portal rasmi Majlis Daerah Pasir Puteh. Retrieved from
http://mdpputeh.kelantan.gov.my/ on 13/7/2021.
GANTT CHART

APRIL MAY JUNE JULY

PROJECT NAME
W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4
PROJECT PLANNING
INTRODUCTION
BACKGROUND STUDY
PROBLEM STATEMENT
OBJECTIVE
SCOPE AND LIMITATION
LITERATURE REVIEW
METHODOLOGY
EXPECTED RESULTS
CONCLUSION
ABSTRACT
GANTT CHART
SLIDE PRESENTATION
SUBMISSION