PETALING JAYA: Gamuda Bhd
has announced that Upper Padas Power Sdn Bhd (UPPSB) has received a letter of acceptance (LoA) from the Sabah State Water Department for the construction of Phase 1 of the Skim Bekalan Air Ulu Padas (SBAUP), with a contract value of RM5.98bil.
In a filing with Bursa Malaysia yesterday, the group confirmed that UPPSB has been appointed for the project, which is designed as a holistic water supply scheme for Sabah’s west coast, with an ultimate design capacity of 950 million litres per day (mld) to be developed in phases.
Phase 1 involves the construction of a water treatment plant with a capacity of 350 mld in Beaufort, along with approximately 200km of pipelines stretching from Sipitang to Kota Kinabalu.
UPPSB is a wholly-owned subsidiary of UPP Holdings Sdn Bhd, in which Gamuda holds a 45% direct equity interest.
In its statement, Gamuda said: “Sabah has been experiencing longstanding water shortages in its main districts, including its state capital Kota Kinabalu – given the state’s narrow reserve margins and amplified by its legacy issues around non-revenue water.”
The group added that demand is expected to increase further, driven by domestic consumption and industrial developments such as the Sipitang Oil and Gas Industrial Park.
SBAUP is being developed as a complementary project integrated with the Ulu Padas Hydroelectric Project (UPHEP), which has an installed capacity of 187.5 megawatts.
Gamuda said the scheme is an expeditious solution to supply water at scale for the state, with Phase 1 targeting delivery of treated water to end-users by 2029.
The integration with the hydroelectric project is expected to improve cost efficiency.
“Leveraging the dual-purpose UPHEP dam, which primarily supplies renewable energy and regulates some 6,000 mld of raw water through Sungai Padas for SBAUP, the total system costs are reduced for water delivery as a separate dam is not required,” the group said.
It added that works on UPHEP are already proceeding at pace with the necessary approvals in place, enabling the fast-tracked delivery of SBAUP as a bolt-on project.
Gamuda pointed out that the combined water and power infrastructure would be critical to attract further high impact investors, supporting Sabah’s economic growth.
Under the LoA, the scope of works includes designing, engineering, procurement, construction, installation and commissioning of intake facilities, pipelines, reservoirs, treatment plants and associated infrastructure.
Construction is expected to begin next month, with a target completion period of 42 months from site possession.
According to the filing, the contract sum of RM5.98bil will be paid through three progressive interim payments totalling RM759mil with a final payment of RM5.22bil upon completion.
Gamuda noted that the project carries risks typical of civil engineering and water treatment works, including regulatory changes, technical failures, environmental impacts, supply chain disruptions, and weather events, but said mitigation measures and contingencies have been incorporated.
Moreover, the group expects SBAUP to contribute positively to its earnings from the financial year ending July 31, 2026 until completion.
It also confirmed that none of its directors or major shareholders had any direct or indirect interest in the project.
