GEORGE TOWN, Nov. 12 -- The Penang state government has defended the RM8.4 billion capacity charge under its conditional water supply agreement with Perak, saying the payment covers a treatment plant dedicated to the state and is spread over 40 years.

State Infrastructure, Transport and Digital Committee chairman Zairil Khir Johari said the charge was a deferred payment for the construction and financing of the plant, which would be built solely to supply treated water to Penang.

"The plant costs RM3 billion to construct. If we include 40-year financing and refurbishment costs, it sums up to RM8.4 billion, a figure that has withstood the scrutiny of financial consultants appointed to conduct due diligence on the project," he said in a s...