Hyflux’s Tuaspring Plant to be turned over to PUB on May 17, Water Purchase Agreement terminated

PUB, Singapore’s national water agency, issued a statement on April 17 (Wednesday) that it is set to take over Hyflux’s Tuaspring Desalination Plant (TSDP) and the Water Purchase Agreement (WPA) would be terminated.

The press release noted that the course of action was done “to safeguard Singapore’s water security” and that “the termination notice provides a 30-day notice period before PUB takes over the TSDP.”

On March 21, the PUB announced its plans to take over the desalination plan if the latter could not resolve its defaults by April 5.

PUB and Tuaspring Pte Ltd signed a 25-year Water Purchase Agreement on April 6, 2011, with Tuaspring obliged to deliver up to 70 million gallons of desalinated water per day to PUB until 2038, a responsibility the desalination plant was not able to uphold on numerous occasions.

Read related: PUB gives Hyflux deadline to resolve defaults, or it will take over Tuaspring

According to CNA, PUB will not conduct a complete management restructuring and will keep the existing staff who have the relevant skills and expertise to operate TDSP.

“We will work out the implementation details and timeline … to facilitate a smooth transition,” said PUB.

It is the focus of PUB to implement the “necessary measures and upgrading works to ensure that Tuaspring Desalination Plant is able to produce desalinated water reliably.”

“The extent of the measures and upgrading works will be determined after PUB conducts a more in-depth engineering assessment,” PUB added.

In response to the termination notice, Hyflux said on April 17, “The termination of the water purchase agreement is expected to have a material impact on the financial performance of the group.”

“The company will make the appropriate announcements as and when there are any further material developments on this matter,” added Hyflux who is currently overburdened by staggering debt among other issues.

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While the initial deadline was set for April 5, Tuaspring requested for an extension of the default notice period to April 30, which PUB agreed to under certain, undisclosed conditions.