Minister tells Selangor to go ahead with water concession takeover

Malaysian Insider, January 31, 2013

KUALA LUMPUR, Jan 31 – Selangor can buy out the water concession if the private utility companies contracted to supply it are agreeable, Datuk Seri Peter Chin Fah Kui said today, adding that the federal government will not block the deal.

“To me, this is an ordinary commercial offer which requires consent from the buyer and seller,” the energy, green technology and water minister (picture) told a news conference in Putrajaya.

“If there is an agreement, just let SPAN and myself know,” he added, referring to water company regulator, National Water Services Commission.

Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim had yesterday announced his Pakatan Rakyat (PR) government will go ahead to take over the state’s water concession within 14 days, and added he had written to Chin’s ministry to inform the latter.

But Chin said today he only knew of Selangor’s plan through news reports.

He said he would reply to the state government once he received the black-and-white.

Selangor has steadfastly opposed the federal government’s Langat 2 project, citing the high costs involved that would force the state to increase the tariffs for water and renege on its pledge to provide the utility cheaply, a policy PR had introduced after winning power in Election 2008.

To facilitate the process, Selangor had first mooted the takeover in 2009, offering to buy Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Sdn Bhd (PNSB), Syarikat Pengeluaran Air Sungai Selangor Sdn Bhd (Splash) and Konsortium ABASS at RM5.7 billion. The offer was rejected.

We are holding on to the word of Tan Sri Muhyiddin Yassin… in Sabak Bernam recently that the federal government will not stop the Selangor government from taking over the state’s water services, says Khalid Ibrahim

Last year, Khalid was reported to have increased the offer to more than RM9 billion to take over all assets and liabilities of the companies, including their bonds.

The tussle for control of treated water supply in the country’s most developed state has become major vote fodder in the run-up to Election 2013 after Syabas raised the alarm last year of a possible crisis in the near future due to near-zero reserves at the state’s water treatment plants.

In recent weeks, Selangor and Syabas again locked horns when each blamed the other for the Klang Valley water crisis.

The blame game between the private company and Khalid’s government has been going on for months and took a new turn earlier this month when the mentri besar mooted a media drive relating their version of events plus a weekly update of the water problem, alleging that the latest disruption was due to Syabas’s poor upkeep leading to faulty pumps in urban Wangsa Maju and Pudu Hulu Baru.

Syabas, in retaliation, placed full-page advertisements in several major newspapers to rebut Selangor’s claims.

The protracted battle for control of water resources Selangor has thrown a spotlight on how much money is at stake in the strategic industry and is potentially another example of Mahathir-era privatisation gone wrong.

It could also tilt the balance in the battle for both Selangor and Kuala Lumpur, depending on who voters ultimately blame for cuts to their water supply. PR parties rule Selangor and control 10 out of 11 parliamentary seats in the Federal Territory.