Perbadanan Kemajuan Negeri Perak and Gamuda Berhad JV (PKNPk-Gamuda JV) together with Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) have signed a landmark Memorandum of Understanding (MoU) for the sale of excess treated water from the Northern Perak Water Supply Scheme (NPWSS) to Penang.
The broader NPWSS is a strategic project to transfer 1,500 MLD of raw water from Sungai Perak to the Bukit Merah Dam, addressing demands for irrigation, domestic and industrial use, including the upcoming Kerian Integrated Green Industrial Park (KIGIP).
The MoU formalises the collaboration between the supplier, being a company to be incorporated by the PKNPk-Gamuda JV (Perak’s state-approved operator) and the buyer, PBAPP (Penang’s water operator). The signing ceremony, held in Casuarina@Meru Hotel, Perak, was attended by YAB Dato’ Seri Saarani Mohamad, Menteri Besar of Perak and YAB Tuan Chow Kon Yeow, Chief Minister of Penang, alongside key officials from both State governments.
This pivotal agreement is the culmination of many months of intensive negotiations, which establishes terms for the sale of water to Penang – specifically the price, quantity and supply tenure – which will be the basis of the definitive Bulk Water Supply Agreement (BWSA) to be entered into between the supplier and PBAPP. The parties intend to execute the BWSA within six months, subject to the relevant authority’s approvals.
YAB Dato’ Seri Saarani Mohamad, Perak Menteri Besar, stated:
“Alhamdulillah, this is a historic day for Perak and Penang, where we have successfully broken through a decade-long interstate water supply impasse. It is only in the last three years that discussions have gained momentum and alignment, which brings mutual benefits to both states. Today, we witness the successful resolution of this journey via the signing of this MOU.
Construction completion is 2030, which is important to address Penang’s projected deficit, as per the report published by Kementerian Alam Sekitar dan Air (KASA) in 2022. For Perak, this critically secures long-term water for the irrigation needs of Northern Perak; and supply for the upcoming KIGIP. This agreement meets the water needs of both States and aligns with our Perak Sejahtera 2030 core principle: managing water, our most valuable ‘Khazanah’, for the economic benefit of Perak by creating a new, long-term revenue stream for the next 40 years.
This project is also perfectly aligned with the new public investment strategy outlined in Malaysia’s Budget 2026. Through this alignment on the key commercial terms, we have a commercially viable project that can be flexibly funded via Federal financing or a Public Private Partnership (PPP) arrangement.
The State Government places its full confidence in the PKNPk-Gamuda JV. Their proven track record in both operating water treatment plants and delivering complex infrastructure on time and on budget provides the necessary assurance that this critical scheme will meet its 2030 completion target for the benefit of both Perak and Penang.”
YAB Tuan Chow Kon Yeow, Penang Chief Minister, commented:
“Penang is committed to solving the State’s long-term water supply issues and we are pleased to reach this landmark understanding with Perak, which is a vital breakthrough for Penang’s water security. This agreement essentially secures a reliable source for long-term treated water at an affordable rate. Penang now has increased diversification of our water supply sources and a reduced reliance on Sungai Muda.
Penang has the Water Contingency Plan 2030, but NPWSS now provides the State with enhanced surety of the much-needed critical water supply coming online by 2031. We hope the project will be delivered on time and are confident it is in the capable hands of the experienced PKNPk-Gamuda JV, given the criticality of this timeline.
This is crucial for Penang’s ability to continue to attract high-value investments, which will support our local economy and industrial growth for decades to come.”
Read Gamuda Berhad’s Bursa Malaysia announcement:
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3606019
Read PBAPP’s Bursa Malaysia announcement:
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3606024
