Penang secures 40-year water supply through landmark Perak agreement

Key Points

Penang signed a 40-year bulk water supply agreement with Perak to secure water from 2032 to 2072.
The state will pay an annual capacity charge of RM210 million to support the project's infrastructure.
Penang will purchase a minimum of 300 million litres of treated water per day, with the option to increase to 500 million.
The agreement aims to diversify water sources and support growing domestic and industrial demand.

Background History

Penang has historically relied on the Sungai Muda river for the majority of its water needs. As a water-stressed state with limited land for new reservoirs, the government has sought to diversify its supply to accommodate population growth and industrial expansion.

Penang has officially entered into a 40-year bulk water supply agreement with Perak, a move designed to guarantee the state's water security from 2032 to 2072. The deal, signed between the Penang Water Supply Corporation and Prasarana Air dan Irigasi Perak Sdn Bhd, marks a significant shift in how the state manages its resources. By securing a secondary source of treated water, Penang aims to reduce its heavy reliance on the Sungai Muda river, which has long served as its primary water supply but faces increasing pressure from rising demand and upstream competition.