Kuala lumpur: The signing of a conditional Bulk Water Supply Agreement (BWSA) between Penang and Perak today guarantees sufficient water supply for Penang for 40 years from 2032 to 2072. Chief Minister Chow Kon Yeow announced that the Perak-Penang Water Project (P-PWP) BWSA between Penang Water Supply Corporation (PBAPP) and Prasarana Air dan Irigasi Perak Sdn Bhd (PAIP Perak) marks a significant milestone in the state's water supply history, following the Sungai Muda Water Scheme in 1973.
According to BERNAMA News Agency, the P-PWP was designed to meet Penang's growing water demand, driven by population growth, socioeconomic development, and new investments. In 2025, the state's water consumption was 865 million litres per day (MLD), with projections indicating an increase to 1,162 MLD or more by 2032 due to factory expansion projects and property developments.
Gamuda Bhd, through a joint venture company, signed a bulk water supply agreement with PBAPP for treated water from Perak under the Northern Perak Water Supply Scheme (NPWSS). The agreement involves PAIP Perak, a subsidiary of Khazanah Air Perak Sdn Bhd (KAP), established as a joint venture between Gamuda and the Perak State Development Corporation (PKNPK) to execute the NPWSS.
Under the agreement, Perak will supply between 300 and 500 MLD of treated water to PBAPP. A new water treatment plant with a 500 MLD capacity, including pumping stations, storage reservoirs, pipelines, and supporting infrastructure, will be built in Perak for the project. The estimated capital expenditure for Perak's P-PWP infrastructure is RM8.4 billion. PBAPP will not bear any CAPEX for the development of the P-PWP water supply infrastructure in Perak or any related costs.
PBAPP will pay an annual capacity charge of RM210 million to support P-PWP infrastructure development investments, along with a treated water charge of RM1.70 per cubic metre, subject to review every three years. The project will not replace Sungai Muda as Penang's primary raw water source but will serve as a secondary source to ensure water supply security, particularly for the Seberang Perai Selatan and Seberang Perai Tengah areas.
Additionally, PBAPP is exploring the potential of using seawater desalination technology to complement the P-PWP for a long-term water supply solution for Penang, despite its higher cost compared to traditional water treatment methods.