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1. How was Thai Tap Water Supply Plc. ("TTW") set up ?

In 1983, the Environmental Policy and Planning Office was instructed to collaborate with the Department of Water Resources and the Royal Thai Survey Department to monitor the groundwater and land subsidence situation in Bangkok and surrounding areas because there were sign of land subsidence and the intrusion of saline water into the underground water sources caused by excessive use of groundwater in such areas. Subsequently, on 23 May 1995, the Cabinet passed a resolution to announce that 6 provinces, which were Bangkok, Nonthaburi, Samutprakan, Samutsakhon, Nakornpathom, and Pathumthani, were under groundwater and land subsidence crisis, then to be controlled areas. In order to alleviate the problems of land subsidence and the intrusion of saline water into the underground water sources, the Department of Water Resources was assigned to control and reduce groundwater consumption. The Bureau of the Budget was, then, instructed to expedite the budget allocation for Provincial Waterworks Authority ("PWA") and Metropolitance Waterworks Authority ("MWA") to expand their tap water services, using surface water resource, to cover all of the critical areas.

From the Government's policy, Thai Tap Water Supply Plc. ("the Company") was incorporated on 11 September 2000 to engage in the business of producing and distributing tap water to PWA in the 5 districts, which are Nakorn Chaisri, Samphran, and Phutthamonthon in Nakornpathom Province, and Krathumbaen, and Mueng Samutsakhon in Samutsakhon Province, under 30-year Water Purchase and Sale Agreement with PWA.

The Company produces and distributes tap water in Nakhon Pathom Province, and Samut Sakhon Province to the Provincial Waterworks Authority ("PWA") (Click for more information)

TTW PTW
Name Customers Provincial Waterworks Authority (PWA) Provincial Waterworks Authority (PWA)
Contract period WPSA - 30 years (21 July 2004 to 20 July 2034) Private Partnership Contract on the Operations of Water Treatment and Maintenance to Solve the Water Shortage Problem in the area under PWA’s Pathum Thani Branch, Rangsit Branch (S), and Klongluang Branch, with a 10-year contact period. (October 15, 2023 – October 14, 2033)
Type of the Contract Build-Own-Operate ("BOO") - remain the ownership in productions and distributions system after the contract end. Operate the water treatment and Maintenance of the system (O & M)
Service areas
  • Nakhonchaisri, Samphran and Putthamonthon District in Nakhonpathom Province
  • Mueng and Krathumbaen Districts in Samutsakorn Province
Pathum Thani - Rangsit areas
Maximum capacity 540,000 M3 / day 488,000 M3 / day
Minimum Off-take Quantity (MOQ) PWA has to purchase 354,000 M3 / day (As of 29 Dec 2008) 358,000 M3 / day (As of October 15, 2023)
Consession for operating tap water business 25 years (11 March 2005 to 10 March 2030) from the Ministry of Natural Resource and Environment 25 years (January 13, 2000 - January 12, 2025) from the Ministry of Interior
Operation and Maintenance by Thai Water Operations Co., Ltd. - the subsidiary of TTW and PTW Thai Water Operations Co., Ltd. - the subsidiary of TTW and PTW
1. How the Company adjust the water tariff ?

According to the contracts, water tariff of TTW and PTW will be adjusted every January. The formula for calculating the new tariff are as follow:

For TTW

Pn+1 Water tariff as of 1 January in year n+1 , unit is cu.m. , count until decimal place 6th
Pn Water tariff as of 1 January in year n , initial value on 31 December 1999 = 13.900000 Baht / Cu.m.
CPIn-1 Consumer Price Index of Central region, announced by the Bureau of Trade and Economic Indices, Department Of Business Economics, Ministry of Commerce, for December year n-1 , initial value on December 1998 = 128.1
CPIn Consumer Price Index of Central region in December year n (*)
K A constant factor for water tariff adjustment, which varies as follow:
  year 1st to year 7th (2000 to 2006) = 1.03000
  year 8th to year 10th (2007 to 2009) = 1.02500
  year 11th to year 14th (2010 to 2014) = 1.01000
  From year 15th (2015) onward = 1.00000
(*) In case CPI of December in year n is not officially announced before the date of issue the bill for January of year n+1, the existing water tariff will be used until the official CPI is announced, then the difference will be calculated and paid in the next payment.

(*) In case CPI of December in year n is not officially announced before the date of issue the bill for January of year n+1, the existing water tariff will be used until the official CPI is announced, then the difference will be calculated and paid in the next payment.


For PTW

BWCi+1 Water tariff as of 1 January in year i+1
BWCi Water tariff as of 1 January in year i
CPIi Country Consumer Price Index, announced by the Ministry of Commerce, as of July of year i
CPIi-1 Country Consumer Price Index, announced by the Ministry of Commerce, as of July of year i-1
CPI Country Consumer Price Index, announced by the Ministry of Commerce, as of July
i The year before the water treatment fee adjustment, which is starting from 2024

*In case of tap water production above MOQ, the selling price will be reduced by 0.44 baht/m3

K factor is a constant factor given in the WPSA of TTW. It is setup for helping TTW in the first few years of operation which incur high risks as there was economy crisis at the time.

1st year - 7th year (2000 - 2006) = 1.03000

8th year - 10th year (2007 - 2009) = 1.02500

11th year - 14th year (2010 - 2013) = 1.01000

From year 15th (2015) onward = 1.00000

Usually, CPI in Thailand grows averagely about 3-4 % each year. At the time of signing the contract of PTW, there was no sigh of economy crisis, more over, that time was the peak of the economic bubble before it bursed therefore, no one ever thought that CPI would go below zero. That's the reason PTW did not put K factor in its tariff adjustment formula.

TTW - Sales volume under 300,000 baht/m3, priced at 31.23 baht/m3

TTW - Sales volume above 300,000 baht/m3, priced at 13.03 baht/m3

PTW - Sales volume under 358,000 baht/m3, priced at 6.50 baht/m3

PTW - Sales volume above 358,000 baht/m3, priced at 6.06 baht/m3

(As of Jan 1, 2024)

1. What are the costs of producing tap water ?

Major cost of production are as follow:

TTW - 2022 PTW - 2022
Depreciation 48% 63%
Electricity 31% 24%
Chemical 6% 3%
Rent 4% -
Others 11% 10%

*Remark - Average for the year 2022

The chemical cost for water treatment would increase, however the WPSA has a clause states that if the raw water quality is lower than a standard set in the agreement, TTW could require PWA to compensate the cost of treating that low quality raw water.

1. Is East Water a director competitor of TTW?

No, because East Water's major business is delivering raw water from the government's reservoir to industrial estates, mainly in the Easthern part of Thailand.

Apart from PWA, the Company doesn't have direct competitor who has similar capability in the service areas. However, the competitors could be small scale tap water operators, such as local municipal, and villages which use underground water to supply people in their areas.

1. Is there any risk of not being able to adjust the water tariff according to the contract ?

WPSA between the Company and PWA states clearly about annual water tariff adjustment. There are no other clause states any acceptional case that prevent the annual water tariff adjustment.

1. Who is PWA ?

PWA is a state enterprise who is responsible for building and managing the waterworks affairs in Thailand, accepts 3 provinces - Bangkok, Nonthaburi, and Samud Prakarn. The responsibility includes exploring water resources, and supply raw water for tap water production. More information https://en.pwa.co.th/contents/about/duty-vision

PWA use one-price policy on its water tariff for the whole country of Thailand although the production cost in each areas are different. However, PWA classifies its customers into 3 catagories which are Household, Commercial, and Industrial, then set the water tariff in progressive rate for each type of customers. The water tariff per unit for each range of volume consumption will not be equal. The more total water volume comsumption will incure higher price per unit than less total water volume consumption.

PWA's current minimum water tariffs

Please visit PWA's website for more details https://en.pwa.co.th/contents/service/table-price

1. Dividend Policy

To maintain a consistent dividend payment and the benefit of the shareholders, the company has set dividend payment policy as follow:

The company will prioritize the financial needs for the next five years and maintain appropriate level of the debt-equity ratio. If there is a possibility to pay dividend, the company will consider paying as high rate as possible. However, such rate shall not be less than 50% of its net profit after corporate income tax, statutory reserve, and other reserves required by terms of relevant agreements.