Accra:Sarawak Water project execution in Sarawak is anticipated to accelerate due to the streamlined governance structure resulting from the consolidation of the state's water agencies.
According to BERNAMA News Agency, CIMB Securities stated that this development will facilitate faster execution of the Sarawak Water Master Plan, which aims for 100 percent water coverage by 2030. The current coverage is about 71 percent in rural areas, and the plan involves a cumulative investment exceeding RM20 billion. This includes RM1.1 billion earmarked for replacing 2,740 kilometers of aging pipelines.
With the merger completed and Sarawak Water Sdn Bhd entering the implementation phase, the streamlined governance structure is expected to expedite the Sarawak Water Master Plan's execution, as noted by the brokerage.
CIMB Securities highlighted that the Sarawak Budget 2027 has allocated RM892 million to enhance water supply infrastructure, marking a 10 percent increase year-on-year and constituting about six percent of the total state budget. The allocation includes RM183 million for the Sarawak Water Supply Grid, RM255 million for the water pipeline replacement program under alternative funding, and RM454 million for water supply facilities, including treatment plant expansions and upgrades statewide.
Sarawak's overall water coverage currently stands at 86.1 percent, compared to the national average of 94.7 percent. The brokerage views the increased water infrastructure allocation positively for Insights Analytics Bhd (IAB), emphasizing Sarawak's ongoing commitment to upgrading and digitalizing its water network.
IAB's proprietary IntelliWater System has been deployed by the Rural Water Supply Department (JBALB) since 2021, supported by annually renewed maintenance contracts. Its digital mapping module, installed for the Sibu Water Board in 2022, is compatible with the consolidated Sarawak Water system. CIMB Securities believes this combination of local track record, proprietary technology, existing system deployments, and longstanding agency relationships gives IAB a competitive advantage in upcoming tenders.
The brokerage also noted that, along with recent project wins, IAB is well-positioned to seize opportunities in non-revenue water reduction, water network digitalization, treatment plant upgrades, and pipeline infrastructure as Sarawak's multi-year water investment cycle gathers momentum.
CIMB Securities has maintained its 'buy' rating on IAB with an unchanged target price of RM1.80 and made no changes to its core earnings per share estimates for the financial years 2026 to 2028.