In its extensive report issued on Friday it said spending on water infrastructure, unlike in other infrastructure segments, is mainly divided into the upstream (raw water source and water treatment/ production) and downstream (reservoirs, pumping stations, and distribution pipeline; aging/old pipes).
Various figures from PAAB, SPAN and industry players suggest that capital investments/capex for the water sector, if viewed over the longer term and on a bigger scale, would amount to RM77bil.
According to SPAN’s estimates, of this value, 70% is the estimated capex needed for nationwide water resource and supply systems and new sources of raw water that involve the construction of dams, off-river storage and new water treatment plants (WTPs).
The balance 30% is the estimated total value of replacing the entire network of old asbestos cement (AC) pipes spanning 43,980km.
CIMB Research pointed out other more recent estimates of water capex (according to Bernama which quoted Selangor Chief Minister Amirudin Shari) include a RM30bil dedicated to the water infrastructure in Selangor.
This is proposed to be implemented from 2019F over a 30-year period (RM1bn p.a.) to improve the state’s overall water services. More specifically, on non-revenue water (NRW), which is the rate that measures the percentage of water loss from distribution pipelines, a total of RM13bn is needed to reduce nationwide non-revenue water (NRW) from 37% in 2015, to 25% in 2020F, and further down to the state’s targeted 15% in 2030F.
The research house segregated the Malaysian water sector into three levels: 1) water and infrastructure ownership and management, 2) upstream operations and suppliers, and 3) downstream operations and suppliers.
The major listed companies that operate across all three levels, as follows:
Consultant engineers that work closely with asset owners, federal government and state governments for water infra planning and engineering consulting services: HSS Engineers (Not Rated);
O&M companies for distribution and production: Ranhill (Not Rated), PBA Holdings, Taliworks (Add, TP: RM1.08), Gamuda Water (80% owned by Gamuda);
Pipe manufacturers and suppliers of small- to large-diameter pipes covering all types of pipes including steel and PVC-O: Engtex , YLI Holdings (Not Rated), Hiap Teck Ventures (Not Rated), JAKS Resources (Not Rated) and Fitters Diversified (Not Rated);
Water meter manufacturers and suppliers: George Kent (Not Rated);
Water chemical suppliers: Kumpulan Perangsang Selangor (Not Rated); and
Water treatment plant (WTP) contractors: Salcon (Reduce, TP: 22) sen.
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