By Rosli Mansor Ahmad Razali
IPOH: Perak will supply up to 300 million litres of treated water daily (MLD) to Penang under a 40-year inter-state bulk water supply agreement, with the first supply expected to commence in the first quarter of 2032.
The strategic collaboration is set to become a catalyst for economic growth in both states while strengthening national water security, particularly in supporting the expansion of industrial, agricultural and future development sectors.
The Bulk Water Supply Agreement (BWSA) was officially signed between Prasarana Air dan Irigasi Perak Sdn Bhd (PAIP Perak) and Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) in Petaling Jaya.
Under the agreement, PAIP Perak will supply treated water from surplus raw water resources under the Northern Perak Water Supply Scheme (NPWSS), while PBAPP will serve as the buyer of treated water for Penang.
As part of the commercial framework, PBAPP will pay an estimated annual Capacity Charge of RM210 million to secure dedicated treatment and distribution capacity, in addition to a supply charge starting at RM1.70 per cubic metre of water supplied.
The agreement, which was developed based on the Memorandum of Understanding (MoU) signed on Nov 6, 2025, also includes a cost adjustment mechanism that covers key operational factors, such as electricity and chemical expenses, to ensure transparent management of cost fluctuations.
Khazanah Air Perak Sdn Bhd (KAP) director Datuk Redza Rafiq Abdul Razak said the implementation of the BWSA marked an important milestone in advancing Perak’s long-term economic development priorities while supporting Penang’s water security.
“The agreement has been carefully structured to ensure Perak’s long-term interests remain fully protected.
“The water requirements of our population, industries and agricultural sectors, including future demand arising from developments such as the Kerian Integrated Green Industrial Park (KIGIP), will continue to be prioritised at all times,” he said.
He said any increase beyond the approved supply volume of 300 million litres daily would be subject to approval from the Perak state government, while all supplies would remain dependent on the continued availability of surplus raw water resources and Perak’s own water requirements.
The agreement forms part of the wider development of NPWSS, which is expected to strengthen Perak’s position as a key economic growth driver within the Northern Corridor.
Beyond strengthening regional cooperation, the initiative is also expected to create a new long-term revenue stream for Perak while encouraging future investments, industrial expansion and job opportunities.
Before the first treated water supply begins in 2032, both parties are required to secure regulatory approvals, including registration with the National Water Services Commission (SPAN), as well as fulfil relevant conditions under the agreement.
