PBA Holdings Shareholders Aye To Proposed Bulk Treated Water Purchase

GEORGE TOWN, Nov 12 (Bernama) – PBA Holdings Bhd (PBAHB) extraordinary general meeting (EGM) today approved the proposed bulk purchase of treated water from Perak under the North Perak Water Supply Scheme (NPWSS), scheduled to commence on March 31, 2032.

Penang Chief Minister Chow Kon Yeow said 97.93 per cent of shareholder votes favoured the proposal, fulfilling one of the two conditions precedent in the bulk water purchase agreement between Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) and Prasarana Air dan Irigasi Perak Sdn Bhd.

“We have secured this approval today and will notify Bursa Malaysia and the company in Perak so that steps can be taken to initiate the relevant project.

“According to the agreement, the date for the receipt of treated water is March 31, 2032 — the deadline by which the project must be completed and the treated water supply delivered to the Perak-Penang border,” he said at a post-EGM press conference.

Chow, who is also PBAHB chairman, said PBAPP will distribute the water to Penang consumers upon receiving supply at the border between the two states.

He noted, however, that the implementation of the agreement remains subject to one additional condition precedent — the Perak side must get the National Water Services Commission’s (SPAN) approval for the agreed-upon tariff structure, which includes capacity charges and supply charges.

“They have until 2035 to secure SPAN’s approval for the tariff, failing which we may choose not to proceed with the agreement because SPAN has not approved the tariff," he said.

On whether purchasing Perak’s treated water will enable Penang to reduce tariffs, Chow said he cannot guarantee this because the agreement already stipulates the relevant charge structure.

On concerns about the project’s financial risks, Chow said five PBAHB board members had previously raised concerns about certain aspects of the agreement. The board discussed this throughout the year-long negotiations. The EGM also clarified issues raised by minority shareholders’ representatives.

Meanwhile, PBAPP chief executive officer Datuk K Pathmanathan said the company will not incur any capital expenditure (CAPEX) for the project. All infrastructure development costs — including the construction of a water treatment plant with a capacity of 500 million litres per day (MLD) — and the operational expenditure (OPEX) related to the production and delivery of treated water are borne by the Perak side.

PBAPP will not need to make any payments to Perak without SPAN’s approval.

Pathmanathan described the project as a practical solution to meet Penang’s long-term water supply needs, given that new water sources within the state have become increasingly limited, and considering the higher costs associated with developing seawater desalination plants.

PBAPP had previously signed a conditional bulk treated water purchase agreement with Prasarana Air dan Irigasi Perak Sdn Bhd under NPWSS on July 15 to meet Penang’s long-term water supply requirements.

The agreement entails the purchase of between 300 and 500 MLD over a period of 40 years from 2032 to 2072, with a total estimated purchase cost of RM24.6 billion, or an average of RM615 million per year.

The estimated purchase price for bulk treated water — at a volume of 300 million litres per day (MLD) — is RM3.62 per 1,000 litres. Meanwhile, Perak is responsible for the CAPEX and OPEX to secure raw water sources and to pump, treat, and distribute the supply.

– BERNAMA