PENANG is exploring various avenues to fund its ambitious RM2.099 billion Water Contingency Plan 2030 (WCP 2030), with a water tariff review already in the pipeline and several large-scale infrastructure projects underway to ensure long-term water security for the state.
Despite the Penang Water Supply Corporation (PBAPP) recording its highest-ever net profit of RM144.17 million in 2024, largely due to the revised water tariffs implemented from February 1 (2024), Chief Minister Chow Kon Yeow stressed that the profit would not be used to enrich the company, but rather to support critical investments in water infrastructure.
“This is an outstanding achievement, but it does not serve to fill PBAHB’s coffers,” said Chow, referring to PBA Holdings Bhd, the parent company of PBAPP during its 25th annual general meeting (AGM) at Jen Hotel today.
“We need to invest around RM2.1 billion in six major infrastructure projects under WCP 2030, and the current water tariff will not be sufficient to fund all these initiatives,” he further added.
Chow confirmed that the Federal Government agency Pengurusan Aset Air Berhad (PAAB) has agreed to provide long-term leasing arrangements for two of the projects, but more than RM1 billion in funding is still required.
He added that the state is looking into financing options and that a tariff review has already been presented to the Cabinet for consideration.
“Water tariffs are under the jurisdiction of SPAN (National Water Services Commission).
“A proposed review has been submitted and is awaiting Cabinet approval and gazettement.
“If approved, it will be implemented according to each state’s schedule,” Chow said.
Separately, he also addressed concerns over the declining water levels in Sungai Muda, Penang’s main raw water source.
“Penang is heavily reliant on Sungai Muda, but we are taking proactive steps.
“The Perak-Penang Water Scheme Project has been approved by the Cabinet and mentioned in the 2025 Budget.
“While the bulk of the infrastructure will be located in Perak, Penang will be responsible for negotiating the commercial terms of the agreement,” Chow said.
In addition, Chow outlined alternative water sources that are being tapped under the WCP 2030.
“We are looking at Mengkuang Dam, Sungai Perai, and Sungai Kerian as supplementary sources of raw water.
“These projects include new water treatment plants and retention ponds next to rivers, which can store emergency reserves in case of low river levels or pollution events,” he said.
One such federal project, currently underway at Sungai Muda, includes the construction of a new barrage and a pump station in Lahar Tiang to divert water to Mengkuang Dam during the rainy season.
This initiative, valued at approximately RM600 million, is expected to secure an additional 400 million litres per day (MLD) of water capacity.
“The WCP 2030 is a stopgap solution to ensure water supply until the Perak-Penang project, which could take four to five years to complete, is ready,” Chow said.
PBAPP chief executive officer Datuk K. Pathmanathan said water demand in Penang had reached 870 MLD in 2024, and efforts are ongoing to reduce non-revenue water (NRW), which currently stands at 28%.
“We are slightly ahead of the national average NRW of 34.6%, but we are aiming for better.
“More than 40% of the losses are due to ageing water meters. We are rolling out smart meters and pipe replacement works across the state, with a total allocation of RM155 million,” he said.
Pathmanathan also noted that upgrading works on the Sungai Muda barrage will increase its capacity to 1,500 MLD, while improvements to the canal infrastructure will allow it to handle 1,700 MLD, part of efforts to maximise raw water drawdown from existing sources.
Separately, Chow announced that PBA Holdings Bhd’s 25th annual general meeting had approved a final dividend of 2.25 cent per share, with an entitlement date set for July 15, 2025. The RM7.5 million payout to 7,157 shareholders will be disbursed on August 1, marking the 24th consecutive year of dividend payments.
Story by Kevin Vimal
Pix by Siew Chia En
Video by Noor Siti Nabilah Noorazis