[1][2] After World War II, George Town experienced continued population growth, raising concerns about the city's water sufficiency.

In response, the George Town City Council initiated efforts to identify new sources of raw water.

[4][5] The new water intakes proved crucial for George Town, enabling the city to withstand prolonged droughts between 1958 and 1960.

[10] In 1992, the Penang state government entered into a memorandum of understanding with the China International Water & Electric Corporation (CWE) for the construction of a M$155 million (ringgit) reservoir at Teluk Bahang.

[13] The joint venture between the state government and CWE also included the development of pumping stations, pipelines, and a 3.4 km (2.1 mi) tunnel connecting the dam to Batu Ferringhi.