KUALA LUMPUR (Dec 17): Malaysia's water asset custodian Pengurusan Aset Air Bhd (PAAB) is set to invest nearly RM1 billion to fund the construction of two water treatment plants in Seberang Perai, Penang, starting in 2025.

The project, a collaboration with the Penang state government, involves the construction of the Sungai Perai Water Treatment Plant (WTP) in Seberang Perai Tengah district with a capacity of 136 million litres of water per day (MLD), and the Sungai Muda WTP in Seberang Perai Utara district with a capacity of 114 MLD.

"Once completed, a 15% treated water reserve supply margin can be achieved and maintained in the state of Penang and hence, will be able to cope with high consumer demand in both Seberang Perai Tengah and Seberang Perai Utara areas to support future development needs," PAAB said in a statement on Tuesday.

The statement was issued after PAAB, a company wholly owned by the Minister of Finance Inc, paid a courtesy call to Penang Chief Minister Chow Kon Yeow to present its roles and responsibilities as a company appointed by the federal government to provide facilitation funds in implementing water infrastructure development projects.

The Seberang Perai area has been facing water problems for at least six years as its only primary water source is from Sungai Muda in the north along the Kedah border. The longstanding water issue was a central issue during the Sungai Bakap by-election back in July 2024.

The Penang state government at the time said that it was working on three projects to address the water supply problems, which had been previously announced under the Water Contingency Plan 2030 by the state government and Penang Water Supply Corporation Sdn Bhd.

In May, Prime Minister Datuk Seri Anwar Ibrahim said Perak had agreed to supply water to Penang via the Kerian Integrated Green Industrial Park into Seberang Perai.

PAAB's role does not stop in Penang. It also covers all states that have entered the National Water Services Industry Restructuring Plan with PAAB.

PAAB forms part of the government’s efforts to restructure the water services industry in the country to achieve better efficiency and quality, as well as to ensure sustainability of the industry.

Its main responsibility is to develop the nation’s water infrastructure in Peninsular Malaysia and the Federal Territory of Labuan, using competitive financing sourced and obtained from the private financial market. The water assets are then leased to water operators licensed by the industry regulator, Suruhanjaya Perkhidmatan Air Negara (SPAN), for operations and maintenance.