Johor to stop buying water from Singapore in August

BY HASNI MOHD NASIR

JOHOR will stop buying treated water from Singapore in August after concessionaire SAJ Holdings Bhd completes distribution pipe laying works in the state.  

“ We will start to phase out (water purchases from Singapore) beginning June,” Mentri Besar Datuk Abdul Ghani Othman told StarBiz.  

Confirming that SAJ Holdings was on track to complete the job, Ranhill Utilities Bhd (RUBhd) chief executive officer Ahmad Zahdi Jamil said: “We will finish laying the pipes in July and will start supplying treated water to Johor Baru district, Pontian and Kota Tinggi in August.”  

RUBhd is a subsidiary of Bursa Malaysia-listed Ranhill Bhd and the holding company of SAJ Holdings. 

Under the existing agreement signed in 1962 between Malaysia and Singapore, Johor sells raw water to the city-state at three sen per 1,000 gallons. The water is then processed by Singapore's Public Utilities Board at its facility in Gunung Pulai, Johor, before being piped to the city state.  

Johor currently buys back from Singapore about 12% of Johor Baru district's treated water requirement.  

Tan Sri Hamdan Mohamad (centre) at a media briefing last week. With him are Ahmad Zahidi Jamil (left) and Ranhill chief financial officer Amran Awaluddin.

Zahdi said SAJ Holdings would provide the replacement supply from its newly completed RM649mil Semanggar water treatment plant in Kota Tinggi. 

The Semanggar plant can treat 35 million gallons per day (mgd) under the first phase, but the capacity can be expanded by another 35mgd under the second phase should the need arise.  

An analyst said Johor's move towards total self-reliance in treated water would be good for RUBhd as the company sought more business in the southern part of Peninsular Malaysia. 

Ranhill president and chief executive Tan Sri Hamdan Mohamad had said RUBhd was looking to sell more water to Malacca from resources in the north of Johor. 

RUBhd, he added, was also hopeful of an opportunity to sell treated water to Singapore once the water issue between the two countries had been resolved. 

Hamdan said the company would be investing a substantial amount to set up the infrastructure for water resources in Sedili and Endau for that purpose. 

“We see the potential to sell up to 100mgd to Singapore and we hope to start doing so in 2011, the year that the water agreement expires,” he added.