Restructuring water service

New Straits Times, 31 March 2009

By : Hamidah Atan

PUTRAJAYA: The Federal Government will not discriminate against the opposition-ruled Selangor government in restructuring its water service.

Energy, Water and Communications Minister Datuk Shaziman Abu Mansor said the restructuring model had been well received by the Negri Sembilan and Malacca state governments.

"It must be emphasised that the Selangor restructuring model is the same one used to restructure the Johor water service, which was implemented successfully.

"It must also be emphasised that the Federal Government will not adopt an approach that is discriminatory in nature against Selangor, even though it is under the administration of the opposition."
The ministry had produced booklets to explain to the public the restructuring of the Selangor water service.

Shaziman said the Federal Government would assist Selangor in the restructuring process but with conditions.

Water company Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), owned by the state government through a 30 per cent equity ownership, is licensed under the 2006 Water Service Industry Act (Act 655).

Three concession water treatment companies -- Puncak Niaga Sdn Bhd (PNSB), Konsortium Abass Sdn Bhd (Abass) and Syarikat Pengeluaran Air Selangor Sdn Bhd (Splash) -- are allowed to continue their operations until their concessionary period expire.

"For Syabas, the proposed service licence allows them to implement water service operations and maintenance of assets. This licence needs to be renewed every three year, depending on the level of compliance," Shaziman said.

A condition was that there should not be any hike in water tariff this year.

He said the ministry's primary concern was to ensure a continuous supply of water and keeping the tariffs low.

Any more delays in water restructuring in Selangor would result in cash flow problems and financial defaults among the concessionaires, which would eventually put the state's water supply at risk, he said.

The ministry had allowed the Selangor government deadline extensions to buy over the water companies on its own four times between Sept 19 last year and Feb 14.



The state eventually offered to pay RM5.7 billion for all the water assets but the companies rejected it, mainly because the offer was too low.