Out-Law News 1 min. read

Malaysia launches tender for its second waste-to-energy PPP project

Malaysia's Housing and Local Government Ministry (KPKT) has launched a tender for a waste-to-energy (WTE) project in Sungai Udang, Malacca under a public-private partnership (PPP) model.

Interested bidders can purchase the tender documents before 10 March at M$10,000 ($2,475.25). The deadline for submission of documents is 10 May.

Qualified bidders should be at least 51% stake owned by local firms and have experience in solid waste management. They also should be experienced in operating solid waste management facilities with a minimum capacity of 800 tons each year.

Qualified bidders should have at least three years track record using the proposed technology, which can be operated for at least 8,000 hours each year.

John Yeap at Pinsent Masons, the law firm behind Out-Law, said: “Waste to energy, particularly incineration of municipal solid waste, has been a challenge not just in Malaysia but many south east Asian countries given the extent of moisture and also the lack of disciplined sorting at source. However, with advancement in technology as well as greater enforcement of sorting of waste, WTE in Malaysia has good potential.”

“There will however be challenges for bidders to navigate, particularly given the tender process which is likely to involve non-negotiable concession and power purchase agreements," he said. "With both these key documents being prepared and entered with different entities, a key challenge will be in ensuring any gap risks can be managed either through project and finance structuring, or other means such as insurance.”

The project is the second of the six proposed WTE projects that planned to be built by 2021 by KPKT.

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