Hyflux develops and operates various types of water treatment plants for municipals and industrial companies in concessions of 20 to 30 years. It has a strong order book of $3,187M as at Dec 2016, of which $1,916M is related to future revenue from the operations & maintenance (O&M) of the water treatment plants over the concession periods. Fig. 1 below shows Hyflux's order book.

Fig. 1: Hyflux's order book

Yet, despite the strong O&M order book, Hyflux lost money in recent quarters from the operations of the Tuaspring Integrated Water and Power Project. In 1H2017, Hyflux lost $25.4M, of which $47.9M was due to Tuaspring. The reason given for Tuaspring's loss is the continuing weak power market for Singapore and losses are expected for the next 2 quarters. Accounting-wise, why did Tuaspring lose money, despite it having a 25-year concession from the Public Utilities Board (PUB) to sell ...