SINGAPORE: National water agency PUB on Wednesday (Apr 17) issued a notice to Hyflux subsidiary Tuaspring to terminate the water purchase agreement and take over the Tuaspring Desalination Plant (TSDP).
"The termination notice provides a 30-day notice period before PUB takes over the TSDP," said the agency in a statement.
PUB had given Tuaspring until Apr 30 to remedy defaults related to the water purchase agreement. The deadline was extended from Apr 5, and was "subject to conditions" although PUB did not state what they were.
Under the water purchase agreement signed with PUB in 2011, Tuaspring has to deliver up to 70 million gallons of desalinated water per day to PUB for a 25-year period from 2013 to 2038.
However, Tuaspring has failed to keep the plant reliably operational as required, PUB said last month.
The agency had also said it is willing to waive the compensation sum it is entitled to under the agreement, and purchase the desalination plant at zero dollars.
Bogged down by a staggering debt load, Hyflux announced last May that it is embarking on a court-supervised reorganisation process and halted trading in all of its SGX-listed shares, leaving tens of thousands of investors reeling.
According to an affidavit on Mar 1, Hyflux chalked up a net loss of S$1.1 billion for the nine months ended Sep 30, 2018, after taking a S$916 million impairment on the carrying value of Tuaspring and other projects.