Gamuda JV, PBA Holdings unit sign 40-year treated water supply deal

15 Jul 2026 | The Edge

(From left) Gamuda Bhd executive director and KAP director Datuk Azmi Mat Nor, KAP director Datuk Redza Rafiq Abdul Razak, PBAPP CEO Datuk Pathmanathan Krishnan Kutty Raman Nair and PBAPP division head of corporate affairs Joyce Lee Suan Imm at the signing of the bulk water supply agreement

Kuala Lumpur (July 15): Gamuda Bhd (KL:GAMUDA) said on Wednesday its joint venture company has signed a 40-year agreement to supply treated water from northern Perak to Penang under the Northern Perak Water Supply Scheme (NPWSS).

The bulk water supply agreement was signed between Khazanah Air Perak Sdn Bhd’s (KAP) wholly-owned unit, Prasarana Air dan Irigasi Perak Sdn Bhd (PAIP Perak), and Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) for the sale and purchase of treated water produced from excess raw water under the project.

KAP is a 50:50 joint venture between Gamuda and Perbadanan Kemajuan Negeri Perak (PKNPk), while PBAPP is a wholly-owned subsidiary of PBA Holdings Bhd (KL:PBA). Under the agreement, PAIP Perak will act as the treated water supplier and PBAPP as the purchaser.

In a statement, KAP said the agreement provides for a 40-year operating period commencing upon the first delivery of treated water, which is targeted for the first quarter of 2032, subject to the completion of the required infrastructure, regulatory approvals and fulfilment of conditions precedent.

PAIP Perak will initially supply 300 million litres per day (MLD) of treated water, with any increase subject to approval from the Perak government. The supply arrangement is also contingent on the continued availability of Perak’s surplus raw water resources and the fulfilment of the state’s own water requirements.

Under the commercial terms, PBAPP will pay an annual capacity charge of about RM210 million to secure dedicated treatment capacity and distribution infrastructure.

A supply charge starting at RM1.70 per cubic metre will apply to water supplied, with a structured escalation mechanism to provide long-term tariff certainty. The agreement also includes cost pass-through mechanisms for electricity and chemical costs to manage fluctuations in key operating expenses transparently.

KAP director Datuk Redza Rafiq Abdul Razak said the agreement marked an important step in advancing Perak’s long-term economic and development priorities while supporting Penang’s water security.

“The agreement has been carefully structured to ensure that Perak’s long-term interests remain fully safeguarded. The water needs of our residents, industries and agricultural sectors, including future demand arising from the Kerian Integrated Green Industrial Park, will continue to take precedence at all times,” he said.

The agreement remains subject to several conditions, including the execution of a definitive agreement between the Perak government and KAP for the NPWSS following the letter of appointment, registration with the National Water Services Commission (SPAN), and approval from PBA Holdings’ shareholders.

At Wednesday’s close, Gamuda shares rose one sen or 0.24% to RM4.16, valuing the group at RM24.81 billion. PBA Holdings gained one sen or 0.51% to RM1.99, giving it a market capitalisation of RM659.23 million.