Gamuda Secures 40-Year NPWSS Water Supply Agreement

Gamuda’s 40-year NPWSS water supply agreement strengthens its recurring income outlook, supporting long-term earnings visibility while awaiting regulatory approvals before the concession begins in 2032.

Gamuda Secures Water Concession

Gamuda has strengthened its long-term earnings outlook after its 50:50 joint venture, Khazanah Air Perak Sdn Bhd (KAP), signed a 40-year Bulk Water Supply Agreement with Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) for the Northern Perak Water Supply Scheme (NPWSS).

Signed on 15 July 2026, the agreement formalises the commercial framework for supplying treated water from Kerian, Perak, to Penang, with operations targeted to begin by 31 March 2032. The project will supply between 300 million and 500 million litres of water daily.

Capacity charges are estimated at about RM210 million annually, of which Gamuda’s share is around RM105 million through its 50% stake in KAP. Supply charges will begin at RM1.70 per cubic metre, with periodic adjustments.

While regulatory approvals remain pending, analysts expect the concession to deliver sustainable recurring income, maintaining an Outperform rating with a target price of RM5.60.