‘Soft loans are for capex projects in Penang’
GEORGE TOWN: The state government has provided RM140 million in soft loans to the Penang Water Supply Corporation (PBAPP), amidst claims that the company is suffering from cash flow problems.
PBAPP chief executive officer Datuk Jaseni Maidinsa said the money would be used to finance its capital expenditure (Capex) projects.
“The Penang government loans are for capex projects, and not for cash flow. These loans will allow PBAPP to succeed in its programmes to support a ‘No Water Rationing Policy’ in Penang towards 2020. PBAPP regrets the publication of news reports suggesting that it suffered from cash flow problems,” he said yesterday.
Jaseni said its public listed holdings company, PBA
Holdings Bhd, had been reporting operating profits and paying dividends to shareholders for 14 consecutive years since 2003.
“However, PBAPP continuously invests in capex projects to improve water supply services in Penang. The cost of these projects is high and requires financing. Between 2008 and last year, PBAPP invested RM484 million in 262 capex projects in Penang. (This year), the Penang government provided two soft loans, amounting to RM140 million, to PBAPP to avoid a water tariff review.”
Jaseni said the loans would be used for water resource development, upgrading and construction of water treatment plants and reservoirs, laying new trunk mains, non-revenue water management, and computerisation and geographical information system projects.
He said these projects were to improve water supply services in the state and to avoid water rationing during dry seasons.