Penang to buy 300 million litres of Perak water a day by 2032

Shareholders of PBA Holdings Bhd have approved a deal for Penang to buy treated Perak water from 2032. The Penang Water Supply Corporation (PBAPP) would take at least 300 million litres a day. Water supply stays a worry elsewhere too, as Johor’s dams were flagged low this month.

Specifically, the vote passed with 97.93% in favour at an extraordinary general meeting. Furthermore, the deal is a bulk water supply agreement (BWSA). It is between PBAPP and Prasarana Air dan Irigasi Perak Sdn Bhd (PAIP). Moreover, Penang Chief Minister Chow Kon Yeow chairs PBA Holdings and PBAPP.

Chow said the vote meets a condition precedent in the agreement. However, the deal still faces a tariff approval. Here is what the Perak water deal covers, when Penang would get the water and what could still stop it.

What Penang commits to buy from Perak

In total, PBAPP agreed to buy a minimum of 300 million litres per day. In the industry, that is written as 300 MLD. In addition, the supply is treated water, so it is ready to drink after distribution.

Perak must deliver the water up to the Perak-Penang border. From there, PBA handles distribution to Penang. Therefore, the two sides split the work at the state line.

The project must be completed, and the water delivered, by 31 March 2032. That is the deadline in the agreement. Meanwhile, the first deliveries are expected to start in 2032.

The report gave no price per litre and no total cost. Likewise, it gave no route for the supply. As a result, those questions remain open.

Why SPAN approval of the Perak water tariff matters

Perak has until 2035 to obtain approval for its proposed tariff from the National Water Services Commission (SPAN). Specifically, the tariff includes a capacity charge and other charges. The report did not give the rates.

However, Chow said the agreement will not proceed if SPAN does not approve the tariff. In that case, a new tariff proposal would have to go back to SPAN. He added that this could cause the project to fail.

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Notably, the 2035 date sits after the 2032 delivery deadline. The report did not explain how the two dates fit together.

The shareholder vote is therefore only one step. Likewise, the tariff decision could decide whether the supply ever starts. Both steps matter for Penang’s water planning.

What happens next after the Perak water vote

PBA will inform Bursa Malaysia and PAIP of the result. Afterwards, the project can start. Chow said the approval satisfies a condition precedent in the BWSA.

Meanwhile, a minority shareholder group wrote to the company before the meeting. It raised issues, which were addressed at the meeting. Chow said no other shareholder raised further questions.

However, the report did not say how the deal will affect water bills in Penang. It also did not say who will fund the works in Perak. Furthermore, it gave no date for a SPAN decision.

In short, Penang shareholders backed a deal for at least 300 million litres a day of Perak water from 2032. The tariff still needs SPAN approval. Watch for that decision and any bill impact.

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