SINGAPORE - National water agency PUB will be taking over troubled water treatment company Hyflux's Tuaspring desalination plant.
It issued a notice to Tuaspring on Wednesday (April 17) to terminate its water purchase agreement with the company, PUB said in a press statement.
The national water agency will subsequently take over the desalination plant after a 30-day notice period.
Tuaspring is at the heart of its parent company Hyflux's financial problems. The once shining star of Singapore companies had liabilities amounting to $2.95 billion as of March 31 last year.
PUB had said earlier that it would take over the Tuaspring plant for zero dollars - while waiving its compensations claims on the company - should Tuaspring fail to keep the plant reliably operational. This was to ensure that Singapore's water security was not compromised.
The plant has had difficulties fulfilling its obligations under the water purchase agreement since 2017. More recently, it failed to produce financial evidence to demonstrate its ability to keep the plant running for the next six months.
About 34,000 Hyflux perpetual securities and preference shareholders are owed a total of $900 million and retail investors have asked the Government to bail out the company. Environment and Water Resources Minister Masagos Zulkifli said in Parliament on April 1 that while the Government can understand the anxieties of retail investors, it “cannot use taxpayers’ money to help investors recoup their investment losses”.