Mainland Penang is set to enjoy greater water security with Bank Rakyat financing RM167mil, or 80%, of construction costs for the Sungai Kerian water treatment plant (WTP).
Entrepreneur Development and Cooperatives Minister Steven Sim Chee Keong said the financing reflected Bank Rakyat’s role as more than just a development financial institution supporting micro, small and medium enterprises.
“Bank Rakyat has proven that institutions under the Entrepreneur Development and Cooperatives Ministry can be strategic partners in national development.
“This financing will ultimately translate into a more stable water supply, industrial growth and wider economic opportunities,” he said at the groundbreaking ceremony for the project in Sungai Kerian, Penang.
Sim said the bank was the sole financier of the project, providing a 15-year financing facility alongside a two-year repayment grace period to support the implementation of the critical infrastructure.
The water treatment plant, valued at more than RM209mil, will have a treatment capacity of 80 million litres per day (MLD) under a 30-year build-operate-transfer (BOT) model.
When operations begin in mid-2027, the plant is expected to supply an additional 80MLD of treated water to about 223,000 consumer accounts in South Seberang Perai and Central Seberang Perai districts.
Sim expressed hope that the project would be completed on schedule while prioritising safety, construction quality, environmental conservation, and good governance.
Penang Chief Minister Chow Kon Yeow said the strategic investment would strengthen the state’s long-term water security while supporting population growth and economic development.
He said the Sungai Kerian WTP would be Penang’s first water supply project to be implemented under a BOT model.
Under the arrangement, Inya Water Engineering (M) Sdn Bhd will build, operate and maintain the plant for 30 years before ownership is transferred to Penang Water Supply Corporation (PBAPP).
Although the project uses conventional water treatment technology, Chow said the BOT model marked an important innovation in the development of the state’s water infrastructure.
“PBAPP will not bear the construction and operating costs of the plant. Instead, it will purchase treated water at an initial rate of 98sen per cubic metre from 2027, with the price reviewed every five years under the agreement,” he said.
Chow, who is PBAPP and PBA Holdings Bhd chairman, said the additional 80MLD represented about 6.6% of the 1,208MLD of treated water produced by PBAPP in 2025.
He said PBAPP would absorb the cost of purchasing the treated water as part of its operating expenses for the first two years, meaning the project would not affect Penang’s water tariff in 2027 and 2028.
Also present were state rural development, agrotechnology, food security and entrepreneurship committee chairman Datuk Rashidi Zinol, state secretary Datuk Seri Zulkifli Long, state financial officer Datuk Zairi Mat Ali, Bank Rakyat chairman Datuk Mohd Irwan Mohd Mubarak, PBAPP chief executive officer (CEO) Datuk K. Pathmanathan, Inya Water Engineering Sdn Bhd CEO Tan Yen Sing and National Water Services Commission (SPAN) northern region director Khitob Ahmad.
