Johari warns states against overcommitting water for data centres

PARLIAMENT | Investment, Trade and Industry Minister Johari Abdul Ghani has cautioned state governments against being too eager to approve water supply for data centre projects without first assessing whether they have sufficient resources.

“Sometimes state governments get excited about calling in data centres and give them everything, but they don’t calculate how much water is actually available,” Johari told the Dewan Rakyat during Question Time today.

He said...

PARLIAMENT | Investment, Trade and Industry Minister Johari Abdul Ghani has cautioned state governments against being too eager to approve water supply for data centre projects without first assessing whether they have sufficient resources.

“Sometimes state governments get excited about calling in data centres and give them everything, but they don’t calculate how much water is actually available,” Johari told the Dewan Rakyat during Question Time today.

He said water supply remained under the jurisdiction of state governments, and that he had repeatedly reminded them to exercise caution before making commitments to investors.

“That is why every time I speak to state governments, I tell them they must be careful when approving water supply,” he said.

Johor and Selangor are currently the main areas of Malaysia’s data centre expansion.

According to a Digital Ministry parliamentary reply published yesterday, 27 projects worth an estimated RM225.97 billion had been approved under the Data Centre Task Force as of July, comprising 16 in Johor, 10 in Selangor, and one in Negeri Sembilan.

Johari added that water-recycling technology is now a requirement for data centres.

However, he said the federal government could do little if a state had already committed to supplying water and maintained that it had sufficient capacity to do so.

“If the state government says it has no problem supplying what it has committed to the data centre application, then we cannot do anything because that is its commitment,” he said.

Is there enough water?

Johari was responding to Rodziah Ismail (Harapan-Ampang), who raised concerns that rapid data centre expansion could consume large amounts of land, electricity, and water at the expense of other needs.

Rodziah (above) pointed out that even housing projects in Selangor had previously faced difficulties securing sufficient water supply.

His warning comes amid growing scrutiny over whether the water requirements of Malaysia’s expanding data centre sector were adequately assessed before projects were approved.

Former National Water Services Commission (Span) chairperson Charles Santiago recently questioned whether sufficient planning had gone into securing water for facilities already operating or under construction.

This followed Deputy Energy Transition and Water Transformation Minister Abdul Rahman Mohamad’s statement in Parliament that Putrajaya was considering requiring data centres to manage their own water supplies to avoid disrupting domestic and industrial users.

Charles argued that such a move raised practical questions about where operators would obtain water, particularly as state water operators primarily supply treated potable water.

He also warned that forcing existing facilities to change water sources could involve high retrofitting costs because their buildings and cooling systems had already been designed around current arrangements.

Span had earlier introduced guidelines prioritising reclaimed water for cooling where available, or air-cooled systems with zero discharge.

Charles (above) said Malaysia ultimately needed clearer rules governing freshwater withdrawals, water-use reporting and allocation during droughts or other periods of water stress.

Over RM385b in data centre investments

Johari, meanwhile, said a total of RM385.7 billion has reportedly been invested in data centres since 2021, comprising RM114 billion in domestic investment and RM271 billion in foreign investment.

However, he stressed that much of the figure had yet to be fully realised.

Some projects had only acquired land or begun site-clearing works, while others were still constructing their facilities.

Malaysia has 57 data centres requiring around 6,230MW of power, while another 60 approved or developing facilities would require a further 11,172MW.

Johari said the government was also moving to ensure that data centres did not draw on electricity capacity reserved for industries, households, and other economic activities.

Developers would also be expected to bear additional infrastructure costs arising from their projects, including transmission-line upgrades where required.