PETALING JAYA: Within the water sector, Pengurusan Aset Air Bhd (PAAB) will invest RM13bil over the next five years in the Langat 2 and Kedah water treatment plants.
A total of RM3bil is also allocated to replace some 820km of old pipes nationwide while RM400mil is allocated for the building of underground dams and reservoirs in Langkawi.
The Langat 2 water treatment plant is able to produce 1,130 million litres of treated water per day or MLD to support demand in Selangor, Kuala Lumpur and Putrajaya.
Analysts said these fresh allocations underline the government’s commitment to provide equal access to all Malaysians via more efficient and cleaner water supply.
Datuk Chong Toh Wee, the managing director of water technology solutions provider Cosmos Technology International Bhd welcomes the budget proposals related to the sector.
“We welcome the proposals related to water infrastructure in Budget 2026 as water is critical to a country’s progress. More resources need to be dedicated to raise the level of water infrastructure in the country,” he said.
Chong also welcomed the efforts laid out in the budget to address the long-standing non-revenue water (NRW) issues in the country.
The replacement of old pipes is essential, especially to reduce water wastage and NRW.
NRW refers to losses that are generated via leakages, burst pipes, pilferages, underbilling (caused by old water meters) or unbilled usage (such as in the case of emergencies). Prime Minister Datuk Seri Anwar Ibrahim has said in the past that Malaysia’s vast water and energy resources are key to its appeal as a prime destination for foreign investment.
“So, definitely these measures are much welcomed,” said one analyst covering the water sector.
Meanwhile, water and pipe-related companies listed on Bursa Malaysia are expected to be beneficiaries of these newly-announced measures.
Kenanga Research told its clients in an August report that looking ahead, it anticipates stronger order flows for pipes with tenders expected to begin in the fourth quarter this year before contract awards in the second quarter of next year.
Adding to the momentum, the data centre (DC) boom is pressuring the government to step up investment in water infrastructure as reliable supply is critical for the cooling functions of DC operations, Kenanga added.
PAAB forms part of the government’s efforts to restructure the water services industry to achieve better efficiency and quality.
Its main responsibility, according to its website is to develop the nation’s water infrastructure in Peninsular Malaysia and the Federal Territory of Labuan, using competitive financing sourced and obtained from private financial market.
The water assets are then leased to water operators licensed by the industry regulator, Suruhanjaya Perkhidmatan Air Negara, known as SPAN for operations and maintenance.
