Sungai Selangor Water Supply (Phase III)

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In March of 1999, Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) received a 30-year BOT contract for the Sungai Selangor Water Supply Scheme Phase 3 (SSP3) project from the Selangor state government. The SSP3 project involved the building of the Kuala Kubu Bharu Dam across the Sungai Selangor River and the construction of two water treatment plants at Rasa and Bukit Badong to produce a total of 1,050,000 cubic meters per day of treated water to serve over 2 million people in northern Selangor and the Klang Valley. SSP3 was being implemented to avert a potential water crisis expected in 2003, driven by rising consumption which had increased from 8% to 9% every year for the previous 30 years. Malaysian firms Gamuda Bhd. and The Sweet Water Alliance Sdn Bhd (TSWA) owned 30% and 40% equity in SPLASH, respectively, while the Selangor state-investment arm, Kumpulan Darul Ehsan Bhd (KDE) held the remainder. Gamuda Bhd. was a major Malaysian infrastructure construction and engineering firm and TWSA was owned by Malaysian tycoon Tan Sri Wan Azmi Wan Hamzah. Puncak Niaga Holdings Bhd., the largest local water company in Malaysia, was awarded a 20% stake in the project in January of 2000, but ultimately declined the stake. In December 2004, Gamuda Bhd. acquired an additional 10% stake in SPLASH from TWSA for RM135 million. Gamuda Bhd, George Kent Bhd, and Rohas-Euco/Biwater were involved in the construction of the facilities. The realignment of a 5km stretch of the Kuala Kubu Baru-Fraser Hill road was also part of this project. Construction commenced in March 2000 and was to be completed in stages from 2001 to 2004. The first stage of the project was completed in July of 2003 and produced 525,000 cubic meters per day, while the second and final phase was completed in July 2005 when the plant commenced full capacity operations. The project required a total investment of RM2.146 billion (US$564.8 million). The project reached financial closure in July of 2000 when SPLASH issued a total of RM1.635 billion in bonds and notes. Commerce International Merchant Bankers Bhd. arranged the issue of MYR1.407 billion (equivalent to MYR1.2 billion present value) in nominal value bonds and MYR435 million in floating rate notes. The remaining RM500 million for the project was to be put in by consortium members as equity. None None