GEORGE TOWN: PBA Holdings Bhd shareholders have approved the proposed RM24.6bil treated water purchase agreement with Perak, with 97.93% of votes cast in favour at an extraordinary general meeting (EGM) here on Thursday (Nov 12).
Penang Chief Minister Chow Kon Yeow, who is also PBA Holdings chairman, said the approval met one of two conditions precedent under the agreement between its subsidiary, Penang Water Supply Corporation (PBAPP), and Perak-based Prasarana Air dan Irigasi Perak Sdn Bhd (PAIP).
"We have secured that approval today and will inform Bursa Malaysia and the Perak company so that the necessary steps can be taken to get the project underway," he said after the meeting at a hotel here.
Chow said the agreement stipulated that Perak must complete the project and begin delivering treated water to the Perak-Penang border by March 31, 2032.
"That is the date by which the project must be completed and treated water delivered to Penang, or to PBAPP, up to the Perak-Penang border.
"Beyond that point, it is the responsibility of PBA to distribute the treated water that we receive from Perak," he said.
He said the other condition precedent was for the Perak company to obtain approval from the National Water Services Commission (SPAN) for the proposed water tariff, with the deadline set for 2035.
"If they cannot obtain SPAN's approval for the proposed tariff, we can walk away from the agreement.
"They would have to return to SPAN to propose a new tariff until it accepts the proposal," he said.
Under the 40-year agreement, which runs from 2032 to 2072, PBAPP is committed to purchasing a minimum of 300 million litres of treated water daily, while the new treatment plant in Perak will have a capacity of 500 million litres daily.
The agreement carries estimated charges of RM24.6bil over 40 years, comprising RM8.4bil in capacity charges and RM16.2bil in water supply charges.
The proposal earlier drew objections from five of PBA Holdings' 12 directors, who raised concerns over the financial burden and risks associated with the agreement, including fixed capacity charges and potential termination liabilities.
Chow confirmed that five directors had expressed concerns over the risks and financial burden, adding that the board had spent about a year discussing the agreement's terms and conditions.
PBAPP chief executive officer Datuk K. Pathmanathan, who was present, said the company would not have to make any payment to Perak if the proposed tariff was not approved by SPAN.
"If the tariff is not approved, there will be no payment to Perak.
"That is why there is no risk at all to PBA," he said.
He said the project was necessary to secure Penang's long-term water supply as the state had exhausted its available resources under the Water Contingency Plan 2030.
