PBA Holdings Bhds (PBA) month-old joint-venture company, Pinang Water Ltd (PWL), has secured its first waterworks project in China that will yield a minimum committed gross revenue of RM243mil over a 29-year period.
The joint venture, which is 26% held by PBA, 37% by YLI Holdings Bhd and 37% by KWI Far East Sdn Bhd, will make an initial investment of about RM17mil in a 100,000 m3/day water treatment plant in Yichun City, in China's Jiangxi Province.
A build-operate-and-transfer (BOT) agreement was signed on July 13 between PWL director Datuk Liew Chook San and the Peoples Government of Yichun deputy secretary-general Liu Desheng.
Liew, who is also PBA chief executive officer and Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) general manager, said the BOT project would initially be financed through a capital injection by PWL shareholders and credit terms from equipment suppliers.
We expect to commence work before year-end. Phase I is scheduled for completion in July 2004 in time for the 5th China Farmers Games to be staged in Yichun city in October, he told a press conference in Penang yesterday.
Also present were YLI group managing director Loh Yok Yeong, corporate manager Eillian Loong, KWI international managing director Jeffrey W. Smith, KWI Far East group corporate adviser Datuk Dr Kang Chin Seng, director Chen Yew Seong and general manager Ooi Kok Ping.
Liew said PWLs revenue would come from the supply of treated water for a period of 29 years from the completion date of phase I of the project, which would initially supply 50,000 m3/day.
The subsequent phases to double that capacity would cost another RM17mil, he said.
Liew said a water sale agreement was also signed on July 13 under which PWL would supply treated water to Yichun Water Supply Co (YWSC) for 29 years.
The three signatories to the agreement were Liew, Liu and YWSC general manager Xu Jianping.
On the BOT project, he said PWL was selected over several local and foreign bidders for its cost-effectiveness, the system that guaranteed high quality water and faster construction due to its modular characteristics, and its use of pre-fabricated equipment.
The plant will utilise patented KWI surface water treatment technology, which offers significant cost-savings, accelerated project completion and significantly higher water quality.
In Penang, PBAPP operates two similar water treatment plants supplying between 15,000 and 20,000 m3/day of treated water which have proven to be cost-effective at Teluk Bahang and Bukit Panchor in Nibong Tebal, he said, adding that Penangs 10 water treatment plants supplied a total of 780,000m3/day.