SPAN REQUIREMENT FOR PUBLIC WATER AND SEWERAGE SERVICE PROVIDER

The Water Services Industry Act 2006 [Act 655] came into operation in all states of Peninsular

Malaysia and Federal Territories of Putrajaya and Labuan on 1st January 2008. Under section 4 of

the Act 655, a person who owns a public water supply system or public sewerage system or any

part of the systems; or undertakes, provides or makes available any water supply services or

sewerage services or part of the services by means of operating a public water supply system or

public sewerage systems will have to obtain an individual licence which shall be granted by

Minister upon recommendation by SPAN.

The applicant will need to apply for the following:

- A facilities licence - a licence that authorises the holder to own a public water supply or any

part of the system.

- A service licence - a licence that gives the holder to undertake, provide or make available any

water supply services or part of the services by means of operating a public water supply

system.

Under the water service licence, there are two (2) categories of licences to be issued as follows:

1) Water Treatment - authorises the holder to undertake water treatment;

2) Water Distribution - authorises the holder to distribute and supply water to consumers by

means of a public water supply system.

Before a formal application is made, applicants are advice to contact SPAN to discuss on the

application process and the information we will require. This will provide an early opportunity for all

parties to raise any significant issues of concern and allow these to be addressed. It also gives

applicants the opportunity to discuss and clarify any queries they have before submitting formal

applications.

Upon approval is obtained, the applicant must provide the following:

1) Whether the application is for a facilities licence, a service licence or a combination of both

facilities and service licence;

2) A certified true copy of approval letter or the application letter from the State Government to

abstract water from the watercourse.

3) The name, registered address, and telephone/fax number of the applicant;

4) Particulars of shareholding of the applicant;

5) Corporate information, including the particulars of any company referred to in paragraph (4)

and particulars disclosing the ultimate beneficial shareholders of the applicant and any

company referred to in paragraph (4) which holds an individual or class licence together with

information detailing the direct and indirect shareholdings of all their shareholders;

6) Aany other individual or class licence held by the applicant under the Act 655, its group of

companies and any company which is deemed to be associated with a director of the applicant

by virtue of section 122A of the Companies Act 1965;

7) Description of the facilities or services to be operated or provided and location of the facilities;

8) The proposed area in which the services are to be provided; and

9) The names of the persons dealing with the application, his or her position, telephone, fax

numbers and e-mail address to whom queries on the application can be directed

Applicant will need to demonstrate that they have the financial and managerial capability to carry

out the licensed activities stipulated in the Act 655. Applicant is required to submit the following:

1) A 30 year master business plan;

2) A three year rolling business plan setting out the applicants plan for expansion, maintenance,

repairs, upgrading, improvement, refurbishment or alteration of the public water supply system.

The business plan must include the anticipated capital and operational expenditure, proposed

financing plan, including the sources of financing, whether domestic or foreign, for undertaking

such activities. SPAN will set out from time to time the information that should be included in

the business plan and the verification statements that SPAN expects to accompany it;

3) The proposed operating and maintenance procedures, including a water or sewerage safety

plan and disaster recovery plan;

4) The proposed standards of performance and key performance indicators to be adopted for

water supply services; and

5) The latest audited accounts and annual reports (for the preceding three years), memorandum

and articles of association and certified true copies of Forms 24, 44 and 49 under the

Companies Regulations 1966.