Saigon Water Supply Corp (Sawaco) will buy 150,000 cubic meters of treated water a day from Kenh Dong Water Supply Joint Stock Co to sell it on to its customers when the facility is commissioned.
Tran Huu Thai, chair of Kenh Dong, said the company was preparing to hold negotiations with the state-owned Sawaco.
The city government has allowed Sawaco to proceed with the deal with Kenh Dong in the outlying district of Cu Chi.
However, Kenh Dong is fulfilling the investment procedures for the project and the plant is expected to start construction this quarter, he added.
The waterworks, which requires an investment of dong 1.2 trillion (US$76 million), will be able to supply 250,000 cubic meters of clean water for Cu Chi and Hoc Mon in HCM City and Duc Hoa District in neighbouring Long An Province after 2007.
The project will be implemented under build-operate transfer (BOT) form and will serve as a backup supply source in the next five years, when two other large-scale water projects, Thu Duc and Saigon River Water, will be up and running.
The Kenh Dong facility will use crude water from Dong Canal (Kenh Dong) in Cu Chi.
Sawaco, which has received complaints from customers about contaminated water in recent months, now supplies about 1.1-1.2millioneubicmetersof water a day for the city while the actual demand is 1.45 million cubic meters.