Lim Guan Eng questions RM8.4b Penang-Perak water deal, says PBAPP must pay even if supply fails

George Town, Nov 12 — Penang's water provider, PBAPP, may be responsible for RM210 million in annual capacity fees, even if Perak does not supply the minimum amount of treated water, according to DAP's Air Putih assemblyman Lim Guan Eng. In a statement, Lim cited this as one of the concerns that led to the opposition from five independent directors of PBA Holdings Berhad, the company behind the proposed 40-year water deal.

The arrangement, which PBAPP signed with Prasarana Air dan Irigasi Perak Sdn Bhd on July 17, 2026, would involve an estimated RM24.6 billion in water purchases over the contract period, said Lim. Despite any failure by Perak to provide the required 300 million litres of treated water per day, PBAPP would still be obligated to pay RM8.4 billion in capacity charges over 40 years, according to Lim.

The assemblyman urged the Penang government to clarify the terms of the agreement for the state's 1.8 million residents, particularly the 'no-fault clause' that he claimed put Penang at a disadvantage. Lim noted that PBAPP would not receive compensation if Perak failed to meet its minimum supply commitment, while still being required to pay the annual capacity charge of RM210 million.