Selangor MB confirms move to end water pact

by Karen Arukesamy, EDGE

SHAH ALAM (Feb 4, 2009) : Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim confirmed today that he has asked Energy, Water and Communications Minister Datuk Shaziman Abu Mansor to terminate the 30-year Selangor water concession agreement.

“Based on the audit report presented to us in December, I have written a letter, as a matter of course, to the minister because the agreement states if Syarikat Bekalan Air Selangor (Syabas) did not deliver as per the agreement signed about four years ago, then the state has a duty to ensure that action is taken,” Khalid told a press conference after a state executive council meeting in his office.

He said that among the measures he proposed in his letter was the termination of the contract. However, Shaziman has not replied to him yet.

“The minister must approve whether we (the state government) can take such an action,” he said.

On the outcome of the Selangor State Economic Council (MTES) meeting on the issue last Friday, Khalid said: “Discussion is on-going. I think I should not reveal each party’s position yet as it is still in the negotiation stage.”

theSun reported on Friday that Syabas, owned by Puncak Niaga (70% share) and state investment arm Kumpulan Darul Ehsan Bhd (30%), had failed to fully comply with the requirement for contracts to be awarded on an open tender basis.

The water concession agreement was signed between the federal and state governments and Puncak Niaga.

The report said the audit of Selangor’s water concessionnaire operations revealed that more than 72% of the contracts worth a total of RM600 million were awarded to selected companies through direct negiotiations and only 25% through competitive open tender.

It said the audit had also found more than RM325 million in discrepancy between the summary of contracts awarded in 2005, 2006 and 2007, and Syabas’ review document.

The audit was a requirement before the company could be allowed to implement a tariff increase, which has been rescheduled to March 31 from the initial Jan 1 this year.

Earlier, Khalid announced that state executive councillors Teresa Kok and Iskandar A. Samad, and Gombak MP and Bukit Antarabangsa assmblyman Azmin Ali have been made members of the Selangor Development Corporation (PKNS) board of directors in a move to strengthen the state-owned companies.

Kok is the chairman of the state investment, industrialisation and trade committee, and Iskandar is the chairman of the housing, building and squatters management committee.