S'gor never asked PAAB to lead talks, says water panel

Edge, 14 December 2009

KUALA LUMPUR: The Selangor state government did not request for Pengurusan Aset Air Bhd (PAAB) to step in to lead the talks in the state's water consolidation exercise as allegedly claimed by PAAB CEO Ahmad Faizal Abdul Rahman.

The members of parliament of Selangor Water Panel, which consist of Tony Pua (Petaling Jaya Utara-DAP), Dr Dzulkifli Ahmad (Kuala Selangor-PAS), William Leong (Selayang-PKR) and Charles Santiago (Klang-DAP), also refuted claims that it was the Selangor government that had caused the water talks to break down.

Ahmad Faizal had blamed the Selangor government for delays resulting in the state's water consolidation talks exceeding a year, according to an interview published by an English daily last Saturday.

"It is the federal government's insistence that Syabas remain the concessionaire for water distribution in the state.

"During the negotiations, the state government had even accepted a compromised proposal where Syabas will remain 51% majority shareholder on condition that there would be an independent professional management and equal board representation," said Pua in a press conference in parliament lobby today.

The water panel also slammed the federal government for offering Syabas a way out of its cash flow problems.

"The fact the federal government had been secretly negotiating a RM320 million interest free, unsecured and back loaded loan facility to Syabas serves only to prove the federal government's bad faith in the entire water talks, for while the state government is negotiating hard the terms of the new concession, the federal government is offering Syabas a way out for its major cash flow problems, which removes the incentive for Syabas to deal with the state government," said Pua.

He added that the lack of commitment from the federal government was clear when it refused to use it powers to get Syabas to the negotiating table with the state government.

According to Pua, Section 114 of Water Services Industry Act gives power to the Energy, Green Technology and Water Minister to force water players to hand over the assets for the sake of national interest.

In the said article, Faizal had also disclosed that PAAB would take into account the fact that the concessionaires' "liabilities are much higher than the tangible assets".

"This means the rakyat will have to bear the liabilities of these concessionaires as part of the takeover of water assets," said Pua.

He said PAAB was not consolidating or restructuring the state's fragmented water industry but was purchasing the concessionaires' assets at higher prices while continuing to issue operating and maintenance licences.

Leong meanwhile said PAAB's conduct had deviated from the objective of the Act.

"The objective of the Act is to enable the state government to operate the water concessions. Now this facility has been given to the concessionaires and not the state government," he said.

Santiago added that there was a sense of "regulatory capture" in the water issue where the companies being regulated were determining the outcome.

Asked what the water panel intended to do in the coming weeks, Pua said it would not rule out "necessary actions" on both concessionaires and the federal government should their meetings fail to achieve a result.