Extracted from 2017 financial report - Hyflux.
In 2011, the Group entered into a service concession arrangement with PUB, the Singapore’s national water agency (the “grantor”) to construct a seawater desalination plant and a power generation facility (collectively the “plants”) in Tuas, Singapore.
In 2011, the Group entered into a service concession arrangement with PUB, the Singapore’s national water agency (the “grantor”) to construct a seawater desalination plant and a power generation facility (collectively the “plants”) in Tuas, Singapore.
The construction of the plants commenced in 2011 and the seawater desalination plant and the power generation facility was completed and available for use in 2013 and 2016 respectively. Under the terms of agreement, the Group is responsible for the construction of the plants.
Upon completion of the construction, the Group will operate the plants and supply desalinated water to PUB and electricity generated from the power generation facility in excess of the requirements of the desalination plant will be sold to the National Electricity Market of Singapore.
The concession period is 25 years, starting from 2013. The Group will be responsible for any maintenance services required during the concession period. The Group does not expect major
repairs to be necessary during the concession period.
The grantor will provide the Group a guaranteed minimum payments for the period that the plants are in operation. Additionally, the Group earned a tariff for the supply of water and has the right to collect and retain proceeds from the sale of electricity, both of which are collected and earned by the Group over and above the guaranteed minimum payments to be received from the grantor.
repairs to be necessary during the concession period.
The grantor will provide the Group a guaranteed minimum payments for the period that the plants are in operation. Additionally, the Group earned a tariff for the supply of water and has the right to collect and retain proceeds from the sale of electricity, both of which are collected and earned by the Group over and above the guaranteed minimum payments to be received from the grantor.
At the end of the concession period, the plants become the property of the grantor and the Group will have no further involvement in its operation or maintenance requirements.
The service concession agreement does not contain a renewal option. The rights of the grantor to terminate the agreement include poor performance by the Group and in the event of a material
breach in the terms of the agreement. The rights of the Group to terminate the agreement include failure of the grantor to make payment under the agreement and a material breach in the terms of
the agreement.
The service concession agreement does not contain a renewal option. The rights of the grantor to terminate the agreement include poor performance by the Group and in the event of a material
breach in the terms of the agreement. The rights of the Group to terminate the agreement include failure of the grantor to make payment under the agreement and a material breach in the terms of
the agreement.
No comments:
Post a Comment