In a joint statement, they said the MoU formalised a collaboration between the joint venture and PBAPP and established the terms for the sale of water to Penang, specifically the price, quantity and supply tenure.

NPWSS is a strategic project to transfer 1,500 megalitres per day of raw water from Sungai Perak to the Bukit Merah dam, addressing demands for irrigation, domestic and industrial use, including the upcoming Kerian Integrated Green Industrial Park (KIGIP).

The agreement will be the basis of the bulk water supply agreement to be entered by the supplier and PBAPP within six months.

Perak menteri besar Saarani Mohamad hailed the signing as a breakthrough after a “decade-long interstate water supply impasse”.

“It is only in the last three years that discussions have gained momentum and alignment.

“Construction completion is 2030, which is important to address Penang’s projected deficit. For Perak, this secures water in the long term for the irrigation needs of northern Perak and supply for the upcoming KIGIP,” he said.

Penang chief minister Chow Kon Yeow said the agreement “essentially secures a reliable source for long-term treated water at an affordable rate”.

“Penang now has increased the diversification of our water supply sources and a reduced reliance on Sungai Muda.

“Penang has the Water Contingency Plan 2030, but NPWSS now provides the state with enhanced surety of a much-needed critical water supply coming online by 2031,” he said.