Singapore’s national water agency, Public Utilities Board (PUB) has decided to terminate its Water Purchase Agreement (WPA) with debt-ridden water treatment firm Hyflux and to subsequently take over the company’s Tuaspring desalination plant.
The Ministry of the Environment and Water Resources statutory board indicated in a statement on Wed (17 Apr) that it intends to do so “[t]o safeguard Singapore’s water security”.
PUB also noted that it has issued Tuaspring Pte Ltd (TPL) a notice regarding the termination and take over, which “provides a 30-day notice period before PUB takes over the TSDP”.
Hyflux, drowning in S$2.7 billion in liabilities as of the end of Sep last year, has given up on a “$380 million rescue package” from the Salim-Medco Group consortium, which was offered “in exchange for a 60% stake” in the water treatment company, as a result of the termination of the bailout deal with SMI.
In its press release last month (22 Mar), PUB claimed that Hyflux has “noted that PUB’s actions … would be favourable to” Tuaspring.
This is because, according to PUB, Hyflux suggested that the Board’s actions will lift “the pressure on the rest of the Hyflux Group”.
Consequently, the value of Hyflux and its shares will most likely observe a positive change as a result of PUB’s actions, according to the statutory board.
The Board added that its takeover of Tuaspring “will also increase the chances of Hyflux being successfully restructured”.
PUB also assured that it has “the operational capabilities, experience and manpower to run” the Tuaspring desalination plant.
As Singapore’s national water agency, PUB is responsible for managing the Republic’s water supply via the Four National Taps, namely local catchment water, imported water, NEWater, and desalinated water.