CIMB Sees SPAN Water Shift Boosting Contractors, Pipe Firms
KUALA LUMPUR, July 8 (Bernama) -- CIMB Securities Sdn Bhd expects spillover opportunities for contractors and pipe suppliers if the National Water Services Commission's (SPAN) call for the data centre industry to shift towards alternative water resources is implemented.
In a research note, the brokerage said it was upbeat on a structural shift in water demand from special economic corridors and industrial zones, including the Johor-Singapore Special Economic Zone (JSSEZ), driven by the rapid expansion of data centre campuses and upcoming industrial facilities in Johor.
“This move entails mapping out wastewater treatment plants that can be connected to new data centres.
“Other proposed water resource projects aimed at sustainably enhancing raw water supply include off-river storage facilities or barges, rainwater harvesting, and using reclaimed water to power data centres' cooling systems,” it said.
Johor has reportedly received 52 data centre applications, nearly double Selangor’s 27, which could push water usage to 79 million litres per day (mld) by 2032.
Data centres planned across several districts in Johor, and a project by Ranhill Utilities Bhd’s unit, Ranhill SAJ Sdn Bhd, are expected to use 440 mld and 614 mld of water, respectively, by 2035.
Meanwhile, CIMB Securities said it believed licensed water operators under SPAN, such as Ranhill Utilities and PBA Holdings, would be the immediate beneficiaries of any water tariff revisions expected in the second half of 2025, including proposed special rates for data centres.
The bank maintained Gamuda as its top pick for water-related infrastructure construction.
“We expect the Penang-Perak water transfer project to commence in 2026, offering RM4 billion in job prospects, alongside other opportunities such as renewable energy initiatives.
“Having secured the main contract for Phase 1 of the Rasau Water Supply Scheme WTP, Gamuda is also eyeing similar work worth around RM300 million in Selangor,” it added.
-- BERNAMA