When the Changi plant is fully operational in 2010, the national water agency PUB expects Newater to provide 30 per cent of Singapore's water needs. Of the balance, about 60 per cent will come from reservoirs and Johor, and 10 per cent from desalination.

The tender award to SembCorp was made yesterday by PUB, which said SembCorp offered the most competitive bid out of six firms that participated by agreeing to produce Newater for 29.966 cents per cu m in the first year.

SembCorp will supply Newater to PUB for 25 years from 2010 till 2035.

SembCorp already owns and operates 14 water facilities across the globe - on Singapore's Jurong Island, and in China, Britain and the United Arab Emirates.

When the Changi Newater plant is completed, SembCorp is expected to produce about four million cu m of water per day around the world.

SembCorp said its Changi Newater investment would be funded using a mix of bank borrowings and internal sources.

This is the second Newater project that the private sector has undertaken. The first was the Keppel Seghers Ulu Pandan Newater plant, which opened in March last year.

When fully operational, the Changi Newater plant will produce 228,000 cu m of Newater a day. This will make it the largest producer of recycled water, overtaking Ulu Pandan's output of 145,500 cu m a day.

Like Keppel Segher, SembCorp will design, build, own and operate the plant.

One innovative feature will be to have main process facilities on the rooftop of the water reclamation facility to save costs, PUB director Moh Wung Hee said

'The design saves on land costs and on laying long pipes to feed the treated used water from the reclamation plant to the Newater plant,' Mr Moh said.

The Changi water reclamation plant occupies 55ha - about 5.5 times the size of VivoCity. It will clean water to international standards before most of it is discharged into the Straits of Singapore and the rest is fed to the Newater plant.

Developed by CPG Corp, the facility has been designed to accommodate the Newater plant.

By the time of the plant's completion in 2010, PUB expects to have spent over $400 million to expand its network of Newater pipelines by 87km.

The completed pipeline will run from Changi Newater plant to Jurong, Tuas, Jurong Island and Sentosa. It will also link to existing Newater pipelines in the Bedok, Seletar, Kranji and Ulu Pandan clusters. Fifteen of a total of 20 expected tenders have been called since September last year.