GEORGE TOWN, Dec 10 ― The Penang state government will not pay Kedah RM50 million annually for raw water that the latter extracted from the former’s side of Sungai Muda.

Penang Chief Minister Chow Kon Yeow said state water operator, Penang Water Supply Corporation (PBAPP), had received a letter from Kedah demanding said payment.

"PBAPP has replied that we will not pay as the raw water was extracted from the Penang side, within our state borders, and it was as per international rights on water,” he said.

However, Chow said Penang will support Kedah in claiming compensation from the federal government for loss of logging revenue if the state gazetted Ulu Muda as a forest reserve and water catchment area.

"We will support Kedah in claiming compensation from the federal government for loss of revenue if logging activities are not allowed in Ulu Muda,” he said.

He was responding to Kedah Mentri Besar Muhammad Sanusi Md Nor who said Kedah had written several times to Penang demanding the RM50 million annual payment for raw water PBAPP extracted from Sungai Muda.

Muhammad Sanusi reportedly said Kedah first sent the claim in 2010 followed by another this year but Penang has refused to pay.

He also hit out at PBAPP for objecting to Kedah’s approval of rare earth elements (REE) mining activities at Ulu Muda, Baling and Sik.

He also said PBAPP has no right to encroach into Ulu Muda and that the state will take action if it happens again.

Chow responded that Ulu Muda was not a restricted area; therefore, any Malaysian citizen is free to venture there.

"I believe a lot of non-governmental organisations have visited Ulu Muda as it is an important water catchment area so I do not see why others can’t visit it too,” he said.

He said similarly Penang could not bar Muhammad Sanusi from entering Penang or passing through on his way to the southern states.

He said the issue at stake is the protection of Ulu Muda as an important water catchment area for Kedah, Perlis and Penang.