Water Supply Management: - Malaysian Water Association.

ASIA WATER 2012Water Supply Management:The PBAPP (Perbadanan Bekalan Air Pulau Pinang Sdn Bhd) Modelby Ir. Jaseni MaidinsaChief Executive Officer, PBA Holdings BhdGeneral Manager, PBAPP© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 1 of 41

SectionsSlide1 History of Water Supply in Penang 3 – 52 Penang Water Supply Infrastructure 63 Corporatisation & Public Listing • Key Initiatives in Corporatisation & Public Listing 7 – 84 Managing Change • Vision, Mission, Commitment & Corporate Objectives• Organisation Structure (2011)• PBA Holdings Equity Structure (2010) 9 – 125 People with New Corporate Culture • Values 13 – 146 New Improved Systems • Customer Care• iRMS & GIS• NRW Management• Certified Management Systems 15 – 207 Competitive Advantages • Uninterrupted Water Supply Programme• Raw Water Sourcing• WCS• Aquasave• PBAPP Prepaid and PBAPP Online Payment 21 – 268 Satisfying Customer Needs • Key Statistics 1985 vs 2010• 2010 Key Performance Indicators• International Domestic Tariffs• Asian Trade Tariffs• FCR Customer Care Branding• Customer Care Commitments• 2010 Customer Care Performance• 2010 POP Results 27 – 359 National Water Services RestructuringInitiative (NWSRI)• NWSRI Restructuring Model• Key Developments in Penang’s Migration to the NWSRI• Stakeholders & Interested Parties / Benefits 36 - 3910 PBAPP Model: The Next Challenges 40© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 2 of 41

1. History of Water Supply in Penang1804 Simple water supply for 10,000 people1900 Universal water metering introduced in Penang1919 Water Department in George Town City Council, Penang1973 Pihak Berkuasa Air Pulau Pinang (PBA) - Statutory Entity1975 Computerised water billing system1993 On-the-spot billing system using hand-held computer1999 Perbadanan Bekalan Air Pulau Pinang (PBAPP)- Corporatisation of PBA© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 3 of 41

1. History of Water Supply in Penang (continued)2001 • Corporate Restructuring• On-line one-stop Customer Care Centres2002 • PBA Holdings Bhd (PBAHB) public listed with PBAPP as subsidiary• On-line Integrated Revenue Management System• 24-hour Call Centre 04-5096509• On-line payment facilities2003 • ISO 9001:2008 certification for Quality Management• Corporate website pba.com.my• Email: customer@pba.com.my2004 Gazetting of Penang’s water catchment areas2005 ISO 14001:2004 certification for Environmental Management:Batu Ferringhi WTP and Teluk Bahang Dam© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 4 of 41

1. History of Water Supply in Penang (continued)2006 • Geographical Information System (GIS)• ISO 18001:2007 for Occupational Health and Safety Management2007 ISO 14001:2004 certification for Waterfall WTP2008 MS ISO/IEC 17025 Accreditation for Laboratories2009 “friendly • caring • responsive” branding for customer care“Aquasave” programme for organisations2010 • ISO 14001:2004 certification for Air Itam WTP• WCS - Water Conservation Surcharge to promote wise water usage2011 • Migration to the National Water Services Restructuring Initiative (NWSRI)• “PBAPP Prepaid” and “PBAPP Online” customer services• “WaterLinks” award for partnership with PDAM Tirta Musi Palembang© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 5 of 41

2. Penang Water Supply Infrastructure© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 6 of 41

3. Corporatisation & Public ListingEfficiencyProductivityOptimisationCostreductionProfitabilityCSR© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 7 of 41

3a. Key Initiatives in Corporatisation & Public Listing• PBAPP was corporatised to be a professional, versatile and result-oriented watersupply organisation.• PBAPP is a holistic water supplier which sources, treats, distributes and bills forwater supply in Penang.• PBAPP is a wholly owned subsidiary of PBAHB.• PBAHB is listed on the Main Board of Bursa Malaysia to facilitate equityparticipation by the public, water consumers and employees.• The Penang State Government holds majority shares, and a golden share, to protectpublic interests.• Since water supply is a critical service industry, PBAPP and PBAHB cannot besolely profit-driven.• The PBA Group operates responsibly by including public interest in decisionmaking:to serve the people and help sustain our planet while making profits.© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 8 of 41

4. Managing ChangeEfficiencyProductivityOptimisationCostreductionProfitabilityVisionMissionObjectivesCommitmentCorporatere-structuringCSR© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 9 of 41

4a. Vision, Mission, Commitment & Corporate ObjectivesVisionMissionCommitmentCorporateObjectivesMeeting All Your Water Supply NeedsPBAPP will be a Leading Organisation in Water SupplyWe will be environmentally sensitive, responsible, professional,innovative and committed to excellence and sustainable development• Supply potable water at the required standards of quality &quantity• Uninterrupted water supply• Customer satisfaction• Skilled, competent and motivated workforce• Timely and orderly development of water resources• Productive utilisation of financial and other resources• Continuous improvement in all fields• Compliance with relevant legislations• Effective relations with government agencies andindustrial organisations© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 10 of 41

4b. Organisation Structure (2011)Chairman & Board of DirectorsCorp. CommunicationsGeneral ManagerExec. SecretaryPlanning &DevelopmentProductionOperationsHumanResourcesFinanceCorporateAffairsQuality,Safety &HealthFacilitiesInternalAuditInformationTechnologyCustomerCare© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 11 of 41

4c. PBA Holdings Equity Structure (2011)YayasanBumiputeraP.Pinang4.1%Penang State Government(via State Secretary Pg) 54.9%EPF4.3%PDC10%Public,Penang waterconsumers andPBAPP employees26.7%(public company)100% 100%100% 26%teambuilding centrewater supply training© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 12 of 41

5. People with New Corporate CultureEfficiencyProductivityOptimisationCostreductionProfitabilityVisionMissionObjectivesCommitmentCorporatere-structuringAccountabilityCommunicationTeamworkIntegrityOn-goingLearningNew ways forImprovement© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 13 of 41

5a. ValuesThe PBA Way People We Motivate (personnel)Best We Deliver (systems)Aim for Excellence (services)Core Values(ACTION)• Accountability• Communication• Teamwork• Integrity• On-going Learning• New Ways for Improvement© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 14 of 41

6. New Improved SystemsEfficiencyProductivityVisionMissionAccountabilityCommunicationCustomerCareOptimisationObjectivesTeamworkCostreductionProfitabilityCommitmentCorporatere-structuringIntegrityOn-goingLearningNew ways forImprovementNRWCertifiedManagementSystemsGIS© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 15 of 41

6a. Customer CareFacility Key Features Goals / BenefitsCustomerCare Centres(CCCs)• 9 CCCs at strategic areas• Online and linked“Customer Help Desks”• 20 types of transactionson-the-spot• Bill collection efficiency• Operational efficiency• Customer convenience & satisfaction24-hourCall Centre(509 6 509)• Open communication 24/7• Online and linked“Customer Help Desks”• Customer convenience & satisfaction• Operational efficiencyWebsite(pba.com.my)• Latest info & statistics• Online account information• Online branding• Customer convenience & satisfaction• Operational efficiencyEmail(consumer@pba.com.my)• Email response within48 hours• Operational efficiency• Customer convenience & satisfaction© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 16 of 41

6b. iRMS & GISiRMS Database Links BenefitsIntegratedRevenueManagementSystem• I.T.• Finance• Customer Care• Corporate Services• OperationsStrumap GIS Integration of BenefitsStrumapGeographicalInformationSystem• Engineering Data• Consumer Data• Aerial Photos• Catchment Plan• Computer-generatedStrategic NetworkModel• 93.2% bill collection• Support operations of “Customer Help Desks” at9 Customer Care Centres & 24-hour Call Centre• Accurate real-time status review of everyconsumer account• Accurate decision-making• Real-time analysis of distribution network• Operational efficiency• Surveillance of catchment areas• Accurate decision-making© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 17 of 41

6c. NRW ManagementWater Supply Value ChainWaterCatchmentRawWaterSupplySystems• dams• canals• mains• pumpingstations• intakesWaterTreatmentPlantDistributionSystems• servicereservoirs• mains• boosterstations• sub-mains• com-pipesMeterPositionInternalReticulationSystems• pipes &fittings• pumps• roof tanks• suction• tanksCost ofwatersoldNew Focus“Traditional” NRW ManagementNew Focus© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 18 of 41

6c. NRW Management (continued)Non-RevenueWater Programmes BenefitsManagingwater loss• Consumer meter accuracy, meter reading accuracyand calibration• Production output meter accuracy, meter readingand calibration• Meter management and replacement• Quality management of materials, technical andengineering practices• Speedy pipe repairs• Pipe replacement programme• Pressure management• District metering• Zone metering for analysis of base night flows• Active leakage control• 18.4% in 2011 vs.national averageof 36.4% in 2010• Cost savings inproduction• Higher revenue• Branding• Chargeableconsultancyoptions© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 19 of 41

6d. Certified Management SystemsCertification Scope Goals / BenefitsISO 9001:2000(UKAS & DAR)Quality Management“Treatment and supply of water andprovision of customer services”• Continuous Improvement• Operational Efficiency• BrandingISO 14001: 2004(UKAS)3 Treatment Plants +1 Dam to dateEnvironmental Management“Management and treatment of rawwater and the supply of potablewater”• CSR• Operational Efficiency• BrandingOHSAS 18001:1999(SGS International)Occupational Health and SafetyManagement• CSR• Operational Efficiency• Legal ComplianceISO17025(Standards Malaysia)Laboratory atSungai Dua WTPTesting, Calibration & Sampling• Operational Efficiency• Legal Compliance© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 20 of 41

7. Competitive AdvantagesEfficiencyProductivityOptimisationCostreductionProfitabilityCSRVisionMissionObjectivesCommitmentCorporatere-structuringValuesAccountabilityCommunicationTeamworkIntegrityOn-goingLearningNew ways forImprovementCustomerCareNRWQualitystandardsGISBetterefficiencyEnhancedproductivityImprovedoptimisationFurther costreductionsBetterprofitability© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 21 of 41

7a. Uninterrupted Water Supply ProgrammeUWSP Projects BenefitsUninterruptedWater SupplyProgramme• Continuous on-going replacement of outdated pipesthan are prone to bursting• Scheduled water interruptions from midnight todawn• Expedited emergency repairs based on informationfrom 24-hour Call Centre• Completion of all emergency repairs within 24 hours• Utilisation of technology (where possible) to fit andjoin pipes without interrupting supply• Materials committee to review and approvematerials for use in water supply networks• Operationalefficiency• ConsistentRevenue• CustomerSatisfaction• Branding© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 22 of 41

7b. Raw Water SourcingNew RawWater Resource Proposal Benefits80% of Penang’sraw water is fromSungai Muda, ashared resourceProjections indicatethat Sungai Mudacan only sustainPenang’s raw waterneeds until Year 2020• Identification of additional(second) key raw waterresource - Sungai Perak• Pumping of water to Penangfor treatment• Potential raw water yield is1,300 MLD• Under National WaterServices RestructuringInitiative, raw water transfercosts will be borne by theFederal Government whilePenang will invest intreatment works• CSR – continuous good watersupply in Penang• Mitigation of risk (water crisis) insevere drought• Sufficiency until Year 2050• Business sustainability© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 23 of 41

7c. WCSWater ConservationSurcharge Rationale BenefitsDomestic consumerswho use more than35,000 liters per monthpay 24 sen more per1,000 liters• Penang’s domestic watertariffs are the lowest inMalaysia (up to 40,000 litersper month)• Penang’s per capitadomestic consumption wasthe highest in Malaysia in2009• Domestic water tariffs aresubsidised• Overall consumption hasincreased by 45.9% since1998• Only those who use more willpay more• Demand management• Reduce wastage• Sustainability of water supply• Moderation of new infrastructureinvestments• Management of water tariffs toensure affordability for all• Reduction of subsidy fordomestic consumption• Maintenance of profitability© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 24 of 41

7d. Aqua Save ProgrammeProgramme to motivateorganisations to be“water friendly” –a joint initiative withby the Penang StateGovernmentKey Features• Open to all commercial and noncommercialorganisations• Evaluation on innovation andeffectiveness of waterconservation initiatives• Awards and certificates to beissued annually• Successful organisations may usecertification for branding• Special incentive for organisationsthat receive certification for 3years in a rowBenefits• Demand management• Sustainability of watersupply• Moderation of newinfrastructure investments• Control over water tariffs toensure affordability for all© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 25 of 41

8. Satisfying Customer NeedsEfficiencyProductivityOptimisationCostreductionProfitabilityCSRVisionMissionObjectivesCommitmentCorporatere-structuringValuesAccountabilityCommunicationTeamworkIntegrityOn-goingLearningNew ways forImprovementCustomerCareNRWQualitystandardsGISBetterefficiencyEnhancedproductivityImprovedoptimisationFurther costreductionsBetterprofitabilityRIGHTBALANCE:servicepricequalityquantitytime© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 27 of 41

8a. Key Statistics 1985 vs 20111985 2011 x times1. Area of Penang State sq km 1,031 1,031 nil2. Water Catchment Areas sq km 62.9 62.9 nil3. Population million 1.07 1.61 1.54. Registered WaterConsumersdomestictradetotal5. Supply Coverage urban %rural %138,69611,419150,11596.087.0449,89270,482520,374100.099.76. Total Pipe Length (100mm & above) km 2,206 4,052 1.87. Treatment Plants no. 11 108. Average Daily Production mld 344 951 2.89. Average Daily Consumption mld 270 776 2.910. NRW % 21.5 18.411. Customer Care Centres no. 6 912. Total Manpower no. 1,164 1,1783.26.23.5© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 28 of 41

8b. 2011 Key Performance Indicators1. Supply Coverage • 100% in urban areas• 99.7% in rural areas2. Average Supply Time 24 hours3. Water Quality Compliance to National Water Quality (MOH)4. NRW Percentage 18.4% (National Average 2010 – 36.4%)5. Average Pressure inDistribution System35m(min. 10m at meter position)6. Water Tariffs • Lowest for domestic in Malaysia*• Amongst the lowest for trade in Malaysia**7. Bill Collection Efficiency 93.2%8. Financials • Revenue RM256.1 million• PAT RM 47.0 million* Average of RM0.31 per 1,000 litres for the first 35,000 liters p/m** Average of RM1.19 per 1,000 litres for the first 500,000 liters p/m© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 29 of 41

8c. International Domestic Tariffs 2010Average in RM (USD*) per 378 litersAverage (approx. in 15,120 RM (USD*) liters per per month) 378 liters(approx. 15,120 liters per month)Source: National Geographic Magazine (April 2010)* Conversion rates February 2011© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 30 of 41

8d. Asian Trade Tariffs 2011© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 31 of 41

8e. FCR Customer Care BrandingThe slogan and the hand sign for “okay” reflect ourcommitment to you from the moment you step into ourCustomer Care Centre.You can look forward to friendly service because wewant to build and sustain a lasting relationship with you.You can be assured of a caring approach as we strive toprovide you with the best possible assistance andadvice.Most importantly, you will find that we are responsive aswe strive to attend to all your needs in a timely manner.Welcome to your friendly, caring and responsiveCustomer Care Centre.© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 32 of 41

8f. Customer Care Commitments 2Service Standards Performance Indicator 20101. Average Waiting Time (CCC) 4 minutes2. Average Serving Time (CCC) 5 minutes3. Average Payment Serving Time (CCC) 1 minute4. Average Speed of Answering Calls 5 rings (20 seconds)5. Average Answering Rate 95%6. Average Message Retrieval 30 minutes7. Average Report Updating 24 hours8. Response to written communications 7 working days9. Response to emails 2 working days10. Follow-up on escalations 5 working days© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 33 of 41

8g. 2011 Customer Care PerformanceWater Service Issues Reported Closed %1. No Water Supply 4,973 4,307 86.62. Broken Pipes 42,587 38,050 89.43. Pressure High / Low 4,029 3,233 80.24. Consumption High / Low 11,441 9,928 86.85. Water Quality 770 697 90.56. Illegal Water Connections 1,090 973 89.37. Road Reinstatement & Potholes 1,367 947 69.38. Billing 8,912 7,169 80.49. Misc. Billing 117 68 58.110. New Supply 30,122 26,372 87.611. Reconnection 26,299 24,969 94.912. Disconnection 44,602 41,477 93.013. Deposit 11,774 9,539 81.0© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 34 of 41

8h. 2010 POP (Public Opinion Poll) ResultsDomestic Consumers %1. Water Quality Acceptance Rating 822. Overall PBAPP Service Approval Rating 953. Water Tariff Acceptance Rating 94Trade Consumers4. Water Quality Acceptance Rating 985. Overall PBAPP Service Approval Rating 986. Water Tariff Acceptance Rating 74© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 35 of 41

9. National Water Services Restructuring Initiative (NWSRI)Pre-2005Jan 2005Jan 2008June 2011Individual States in Malaysiawere responsible for watersupply servicesThe Malaysian Constitutionwas amended – treatment anddistribution of water became ajoint responsibility with theFederal GovernmentThe National Water ServicesCommission (NWSC) Act andWater Services Industry Act(WSIA) were implemented tofacilitate Federal regulationPenang migrated to theNational Water ServicesRestructuring Scheme© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 36 of 41

9a. NWSRI Restructuring ModelMINISTRY ofEnergy, Green Technology and WaterGRANTS forConstructionof Raw WaterResourcesPolicy MakingNational Water Services Commission(SPAN) - REGULATORRegulation & LicensingWater AssetManagement Company(PAAB) –WATER ASSETOWNER &DEVELOPERLease PaymentsLease AssetsLicensed Water Operators(such as PBAPP) –OPERATIONS &MAINTENANCEWater SupplyCONSUMERS* Source PAAB© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 37 of 41

9b. Key Developments in Penang’s Migration to NWSRI1 Federal grant provided to finance RM1.2B Mengkuang Dam expansion projectthat will help to assure raw water sufficiency until 2020.2 Repayment of outstanding Federal loans totalling RM655.24M for past waterinfrastructure projects stretched to 45 years without interest.3 Penang state water supply assets (valued at RM655.24M) alienated to PAABfor 45 years. PBAPP assets are not affected.4 PAAB leases water supply assets back to PBAPP for a lease payment ofRM14.56M per annum.5 Upon full settlement of the lease in 45 years, the water supply assets revertsback to the Penang State Government.6 PBAPP is licensed by SPAN as the State Water Operator for Penang.7 PBAPP pays a License Fee of 1% of its gross water revenue per year for theService and Facility Licences from 31 May 2012.8 PBAPP has option to tap PAAB funds for future infrastructure projects.9 Penang State Government retains control of PBAPP via majorityshareholdings in PBA Holdings Bhd – PBAPP’s public listed holding co.10 Penang State Government retains control of water tariffs.© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 38 of 41

9c. Stakeholders & Interested Parties / Benefits1. People of Penang • Compliance with Federal Law2. Penang State Government3. Malaysian Federal Government4. SPAN – the National Water ServicesCommission5. PBA Holdings Bhd(PBAPP’s public listed holding company)6. Shareholders7. Bursa Malaysia (Malaysian Bourse)8. Malaysian Securities Commission9. Minority Shareholders WatchdogGroup (MSWG)10. Share Analysts11. NGOs – Non-GovernmentOrganisations• Penang State Government retainscontrol of PBAPP and water tariffs• Penang gets RM1.2B grant forMengkuang Dam expansion project• Federal grants for future raw waterresource development projects• Repayment of RM655.24M inoutstanding Federal loans stretchedto 45 years on interest-free basis• Option to access funds from PAABfor capex to implement waterinfrastructure projects© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 39 of 41

10. PBAPP Model : The Next Challenges• Highly Competent,Motivated & CreativeWorkforce• ContinuousOperationalExcellence• Continuous FriendlyCustomer Services• ContinuousReduction of Costs& Wastages• Least Cost FundsAcceptableWaterTariffsReasonableprofitsTo Be AWorld-ClassWater Supplier© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 40 of 41

THANK YOUIr. Jaseni MaidinsaChief Executive Officer, PBA Holdings BhdGeneral Manager, PBAPP Sdn Bhd© Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 2012. All rights reservedASIA WATER 2012, Kuala Lumpur Convention Centre, 28-03-2012 / Slide 41 of 41