How much will Penang pay Perak annually for treated water?

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Penang to Pay RM210 Million Annually to Perak for Treated Water Supply

Penang will make an annual capacity charge of RM210 million to Perak as part of a Bulk Water Supply Agreement (BWSA) for treated water. This agreement, spanning from 2032 to 2072, also includes a treated water charge of RM1.70 per cubic meter, subject to triennial reviews.
Annual Capacity Charge Structure

The RM210 million annual payment is designed to amortise and justify the substantial investment required for the dedicated Perak-Penang Water Project (P-PWP) infrastructure. This infrastructure in Perak, which is projected to have a total capital expenditure of RM8.4 billion, will be built, operated, and managed by PAIP Perak.
Treated Water Purchase Terms

Beyond the capacity charge, Penang will also incur a per-cubic-meter cost for the treated water itself. This rate is set at RM1.70 per m3, with provisions for this rate to be reviewed every three years. The agreement initially commits Penang to purchasing 300 million litres per day (MLD) of treated water, with the option to upscale this commitment with six months' notice.
Rationale for the Agreement

Penang's decision to secure water from Perak stems from the state's limited in-state raw water resources. Projections indicate that Penang's water consumption will increase from 865 MLD in 2025 to over 1,162 MLD by 2032, driven by industrial expansion and property development. The P-PWP agreement offers a crucial second major water resource, supplementing the existing Sungai Muda supply.
Significance of the Agreement

This BWSA represents a significant development in Penang's water supply history, being the most substantial agreement since the Muda River Water Scheme was commissioned in 1973. While the agreement does not replace Sungai Muda as the primary resource, it will provide additional water to support growth in Seberang Perai Selatan and Seberang Perai Tengah. Penang is also exploring seawater desalination as a supplementary long-term solution, though current costs for this technology are higher than conventional treatment methods.

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How much will Penang pay Perak annually for treated water?

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