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After independence in 1957, urban centers were the early beneficiaries of treated water supply. The construction of water supply infrastructure to urban areas was premised on economic viability and high population concentration. The expansion of urban water services took place in the context of Malaysia's five - year national development plans, beginning with the First Malaysia plan from 1966 - 70. It is important to note that the development and expansion of the water supply system was perceived as critical to the overall development of the country. Access to water was perceived as a critical development goal, especially for socio - economic development of the nation. The Asian Development Bank (ADB) and the World Bank provided low interest loans for the expansion of urban water services. An ADB loan of US 105 million in 1992 helped improved the water supply in 24 districts in seven states: Kedah , Melaka , Negeri Sembilan , Pahang , Perlis and Terengganu. The development of rural water supply was given priority in the Third Malaysia Plan from 1976 - 80. The rural water supply came under the purview of National development strategies after a ten year period as compared to urban centers. this was because rural water projects were considered uneconomical and state government could not afford them. The initial rural water supply network was centered around areas which bordered urban water supply systems and land development schemes by the government and related agencies. Subsequent Malaysia Plans emphasized greater investment in water supply in the rural areas of the country. A major success of the government's development strategy was the provision of affordable and universal access to water for its people. This was made possible through cost sharing between federal and state government. The federal government provided the interest - free loans for capital investment, and the state government provided subsidies' for water rates. Malaysia's five - year national development plans successfully realized access to drinking water for its entire population. In 1950, it was estimated that approximately 23 percent of the population had access to clean drinking water. In 1970, this number more than double to 51 percent of the population. By the end of 1997, about 96 percent of the urban population and 86 percent of the rural population had access to public water supply. Taken together , a national coverage of 91 percent water access was achieved in the country. Based on the Seventh Malaysia Plan ( 1996 - 2000) estimates for the year 2000, approximately 95 percent of the population would have had access to drinking water supply coverage.
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