BY MOHD FARHAN DARWIS
He said Selangor Menteri Besar Tan Sri Khalid Ibrahim did inform him about the progress of talks between the state and Putrajaya on the matter, but not the latest development.
"I know of the earlier agreements. Khalid has told me from time to time. But not today's MOU. I don’t know,” he said after a meet the people session today in Taman Cuepacs, Kajang.
The agreement is the culmination of a protracted four year negotiation between Putrajaya and the Selangor government.
Present at the signing session in Putrajaya today were Prime Minister Datuk Seri Najib Razak, his deputy Tan Sri Muhyiddin Yassin, and Energy, Water and Green Technology Minister Datuk Seri Dr Maximus Ongkili, who represented the Federal government, and Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim.
The MoU will, among others, enable Selangor to take over four water concessionaires in the state, costing the state government RM9.65 billion in compensation to the companies. In its place, a consortium will be formed to manage the water industry under state-owned Kumpulan Darul Ehsan Berhad.
Selangor has long resisted the Langat 2 water treatment plant despite insistence by Putrajaya that it was necessary to ensure future water supply.
Last year, Khalid's state administration made a final offer of RM9.65 billion to buy over all equities of the four water companies – Syarikat Bekalan Air Selangor Bhd (Syabas), Puncak Niaga Sdn Bhd (PNSB), Konsortium Abbas Sdn Bhd and Syarikat Pengeluar Air Selangor Holdings Bhd (Splash).
The offer was turned down by PNSB and Konsortium Abbas last December, but Puncak Niaga Holdings Bhd – which owns PNSB and has a 70% stake in Syabas – revived talks on several conditions, which included a 15% return on equity for its water concessionaires, according to a report by The Edge Financial Daily.
However, Khalid said whatever the outcome of the negotiations, both the state and Federal governments were adamant about going ahead with the restructuring exercise.
“They (concessionaires) have indicated their position on this... they should be responsive because the law allows for the Federal and state governments to implement the takeover.
“This is the best that we can offer. We did include a clause that if they feel short-changed, they can go for international arbitration.
“If the international arbitration decides that we should pay more, then we will pay more, but we also gave an undertaking that if the international arbitration says it should be cheaper than what we are offering, we will maintain our offer,” Khalid had said.
Last week, Ongkili had said Putrajaya preferred for all parties to reach a mutual agreement on the takeover of water assets in Selangor.
He, however, did not discount the possibility that the Federal administration will resort to invoking Section 114 of the act – which gives the Federal government ultimate power over all concessionaires – if the talks fall through.
“Hopefully, many things can be finalised in the next few weeks,” he was quoted as saying by Bernama.
Negotiations on how to proceed with restructuring Selangor's water industry met numerous obstacles over the years, not least being what Khalid previously described as “unrealistic expectations” of the water concessionaires’ shareholders regarding their companies’ equity value.
The state and Federal governments had also been at loggerheads for the longest time, especially over the construction of the Langat 2 water treatment plant in Kuala Langat, which will process raw water piped from Pahang to meet growing demand for treated water in the Klang Valley. – February 26, 2014.