Air Selangor cuts bulk water supply rate in offers to Gamuda, Taliworks

PETALING JAYA: Gamuda Bhd and Taliworks Corp Bhd have been informed by Air Selangor of a cut in the bulk water supply rate for the third phase and first phase of the Sungai Selangor Water Treatment Plant (SSP) by 2 sen/m3 and 5 sen/m3, respectively.
Both Gamuda and Taliworks are required to revert with acceptance of the respective offers by 5pm, Aug 27.
In a filing with Bursa Malaysia on Tuesday, Gamuda said its 80%-owned Gamuda Water Sdn Bhd had received a letter of offer dated Aug 21, 2018 from Air Selangor setting out the termination of the existing operations and maintenance agreement (OMA) of SSP3 with Splash as well as the settlement of the outstanding Gamuda Water's receivables from Splash.
Gamuda Water and Air Selangor will execute a new SSP3 OMA, which will start on the operational date until Dec 31, 2029.
The bulk water supply rate is set at 44 sen/m3 from the operational date till end-2018; 46 sen/m3 from 2019 to 2022; 47 sen/m3 for 2023; and 53 sen/m3 from 2024 to 2029.
For Taliworks, the bulk water supply rate under the new OMA will be a rate equal to a 5 sen/m3 reduction to the existing rate under the SSP1 OMA from the operational date to end-2029, being the expiry date of the existing SSP1 OMA and a final rate of 52.5 sen/m3 for the seven-year extension from 2030 to 2036.
A letter received by wholly owned subsidiary Sungai Harmoni Sdn Bhd dated Aug 21, 2018 spelt out key terms of settlement between Air Selangor, Splash and Sungai Harmoni relating to Sungai Harmoni's outstanding receivables arising from the existing operations and maintenance of the SSP1 as well as key terms in respect of the new OMA between Air Selangor and Sungai Harmoni.
Under the termination and settlement agreements, Splash will pay to Gamuda Water and Taliworks, as full and final settlement of all amounts owing by Splash to Gamuda Water and Taliworks under the SSP OMA, an amount equal to 90% of the outstanding fee.
Gamuda and Taliworks said their boards of directors are reviewing the terms contained in the offers and will make the appropriate announcement in due course after going through due process internally.