KUALA LUMPUR (Nov 6): Gamuda Bhd (KL:GAMUDA) said on Thursday it has signed a pact to explore the supply and sales of excess treated water to Penang from its proposed plant in Perak.
Under the terms of the non-binding memorandum of understanding (MOU) signed, the parties will aim for a formal agreement within the next six months. The supply could then be ready by the first quarter of 2031, Gamuda said in an exchange filing.
“This is a historic day for Perak and Penang, where we have successfully broken through a decade-long interstate water supply impasse,” Menteri Besar Datuk Seri Saarani Mohamad said in a joint statement issued later.
The project comes amid an interstate dispute between Kedah and Penang over shared use of Sungai Muda. Last year, Kedah Menteri Besar Datuk Seri Muhammad Sanusi Md Nor threatened to sue Penang to demand payments for raw water collected from the river.
Thursday’s MOU follows the appointment of a joint venture between Gamuda and Perbadanan Kemajuan Negeri Perak in July for the development and operation of the water treatment and distribution infrastructure in Kerian and supply of treated water to the Kerian Green Industrial Park.
The project is a key component of the RM5 billion Northern Perak Water Supply Scheme to address long-standing water shortages for irrigation, domestic and industrial use in the northern region of the state.
The MOU formalises the proposed principal commercial terms with Perbadanan Bekalan Air Pulau Pinang, a wholly owned unit of PBA Holdings Bhd (KL:PBA), as the designated buyer. The salient terms of the formal agreement include a 40-year supply period.
“This agreement essentially secures a reliable source for long-term treated water at an affordable rate,” Penang Chief Minister Chow Kon Yeow said in the joint statement. “Penang now has increased diversification of our water supply sources and a reduced reliance on Sungai Muda.”
For Perak, the project will provide long-term water for the irrigation needs of northern Perak and supply for the upcoming industrial park in the state while creating a new revenue stream for the next 40 years, Saarani added.