The Malaysian company Ranhill Utilities Bhd is spending US$ 176 million between 2003 and 2005 mainly on water treatment plants and replacing some 500 km of old water distribution pipes in Johor.
President Tan Sri Hamdan Mohamad said the capital expenditure, which was allocated under the concession's Second Operating Period that started in January 2003, was aimed at reducing the company's non-revenue water and increase production efficiency. The utility company expects to replace some 1,500 km of cement asbestos pipes by 2005.
Cement asbestos pipes make up 58% or 5,000 km of Johor's 9,000-km water distribution network. The rest are steel pipes that can last up to 100 years. Under the First Operating Period (2000-2003), Ranhill Utilities was to replace some 900km to 1,000km of cement asbestos pipes at a cost of US$ 40 million.
Hamdan said Ranhill Utilities would raise US$ 79 million in July from the bond market to fund the programme. The company has committed to US$ 342 million in capital expenditure over seven years. Ranhill Utilities is the investment holding company of Syarikat Air Johor Holdings Sdn Bhd (SAJH), which has the concession to build, operate and manage Johor's water supply system for 30 years since 2000.
