KUALA LUMPUR (Dec  27): Ranhill Holdings Bhd's subsidiary Ranhill SAJ Sdn Bhd and water asset management company Pengurusan Aset Air Sdn Bhd (PAAB) will spend RM3.4 billion to accelerate the reduction of non-revenue water (NRW) in Johor to 5% by 2025 from its current 24.12%.

In a statement today, Ranhill said the accelerated NRW reduction programme in the State will span over seven years.

"As Ranhill SAJ accounts for 77% of Ranhill Group's total revenue, the seven-year programme is expected to contribute positively to Ranhill SAJ’s as well as the group’s bottom line in the long term.

"Ranhill SAJ — Johor’s exclusive water services operator — will pay back the capital expenditure from PAAB through a lease rental arrangement with the company," it added.

It noted that the programme was initiated to address two main losses: physical and commercial.

"We have identified areas, where physical and commercial losses are most evident and these will be addressed by the programme," Ranhill president and chief executive Tan Sri Hamdan Mohamad said, adding that the group is confident of meeting the 5% NRW target by 2025.

Under the programme, there are 94 pipe rehabilitation projects to be completed by Ranhill SAJ by 2020, while steps will also be taken to address inaccurate meter readings and illegal use of water in the State.

According to Ranhill SAJ, the programme has been approved in principle by the National Water Services Commission (SPAN).

"In addition to the Ranhill SAJ programme’s goal of saving 323 million litres per day (mld) by 2025 which is the equivalent of supplying 323,000 homes, it is expected to spur the local economy and provide experienced local contractors with an opportunity to tender for work to be sub-contracted out," said Ranhill.

Ranhill SAJ operates and maintains a combined production capacity of 1,827 mld. It reduced the state's NRW from 45% in 1999 to the present 24.12%, with physical loss of only 17.5 cu m per km of pipe per day.

Ranhill shares closed 5 sen or 4.39% higher at RM1.19 per share today, with 763,300 shares traded, bringing it a market capitalisation of RM1.01 billion.