Selangor Water Issue To Be Referred To Cabinet

BERNAMA, March 30, 2009


KUALA LUMPUR, MAR 30 (Bernama)-- The unresolved issue of the Selangor Government's proposal to restructure the water industry in the state will now be referred to the Cabinet for a decision.

Energy, Water and Communications Minister, Datuk Shahziman Abu Mansor, said a paper on the issue has been prepared and would be tabled at the Cabinet meeting on Wednesday.

The contents of the paper were not revealed.

He said the Federal Government was concerned as the unresolved issue would entail a penalty whereby some 1.5 million consumers in Selangor, Kuala Lumpur and Putrajaya would have to pay an extra 37 per cent in water tariff.

This is because of the existing 30-year agreements between the state government and the four water concessioners in the state -- SYABAS, Puncak Niaga, SPLASH and Abas -- which expire in 2034, allow a tariff increase periodically.

The latest was supposed to be on Jan. 1, 2009

The present average tariff is RM1.39 per cu metre and this would be increased to RM1.90

However, this was deferred to March 31, as the Selangor Government has proposed to buy over the assets of all the four concessioners thereby automatically abrogating the agreements and taking over the management of the water industry in the state and thus restrucuring its tariffs.

Negotiations between the parties were now stalled as they were not agreeable to the quantum of the payment for the assets which included main pipes, water treatment plants and water catchment areas.

The state government has offered RM5.1 billion for the assets.

Shahziman said the Federal Government was still open to any counter proposals.

"The ball is now in the state government's court," he added

Meanwhile, the Malaysian Water Forum, a non-government organisation, hoped that there would be no tariff increase while negotiations were on-going.

Its secretary-general, S. Piarapakaran, told Bernama the issue was causing much concern to consumers as they were afraid of an increase which would burden them especially during the economic downturn.

He said the Forum wanted the Federal Government to take over the assests through the Pengurusan Aset Air Bhd, a company under the Finance Minister Inc.

Piarapakaran said Johor, which also faced the same predicament as Selangor, managed to resolve it.

"We are sure if Selangor is sincere in wanting to resolve the issue, it can be done," he said.

-- BERNAMA