KUALA LUMPUR, Nov 30 (Bernama) -- The government and a number of parties involved will suffer losses if the Langat 2 Water Treatment Plant project was not completed by year end.
Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui said the refusal by the Selangor state government to approve the land accusation, permit to enter the forest reserve and directive for development would increase the cost of building the plant that was supposed to have started in August.
"The project was up for tender and the contractors had started work according to schedule and if the tunnel is not completed by 2014, the contractor will not receive any commission... the project will then be stalled," he told Datuk Ismail Mohamed Said (BN-Kuala Krau) at the Dewan Rakyat here Tuesday.
Peter Chin said the Pahang state government that has given their cooperation by allowing water from the state to be channelled to Selangor may also suffer losses due to the delay.
"Since the project cannot go on, royalty for water will not be paid to Pahang and that will be a loss to the state," he said.
According to Peter Chin, the Langat 2 water treatment plant is part of the Pahang-Selangor Interstate Water Transfer Project, which will ease the water shortage problem in Selangor and Kuala Lumpur by transporting 1,890 million litres of raw water from Pahang daily.
He said it was important that the construction of the Hulu Langat plant be expedited to match the schedule for transfer of raw water from Sungai Semantan in Pahang beginning 2014.
When completed in May 2014, the project was expected to supply some 1,890 million litres of raw water from Sungai Semantan in Pahang daily via a 44.6-km tunnel through the Main Range to Selangor.
Pahang and Selangor had signed a concession agreement in 2007 for Pahang to supply raw water at 10 sen per cubic metre, with a review of the rate every five years.
Peter Chin said the raw water transfer project from Pahang to Selangor was given the green light by the Federal government in 2005. -- BERNAMA
Tuesday, November 30, 2010
Water relief for diabetic
HASMA Om, who is diabetic, was relieved when Syarikat Bekalan Air Selangor (Syabas) picked her as a recipient of the Tabung Budi fund.
Hasma, who lives in Desa Pandan, Kuala Lumpur, was visited recently by Syabas chief operating officer Datuk Ruslan Hassan.
Her water bill arrears of RM596.29 were paid off and she also received free water for the next six months through the fund.
Hasma’s daughter Aisyah Mokhtar said she had to stop working four years ago to care for her ailing mother, who had to have her toe amputated due to diabetic complications.
“My niece’s husband, who was the family breadwinner, also passed away, so it has been difficult for us to take care of the bills.
“What I manage to make selling kuih is not sufficient as there are seven of us living in the house,” Aisyah said.
Also receiving help from the fund were Nor Haslina Mohamed Yunus whose arrears totalled RM333.38 and Loganathan Saminathan, who owed Syabas RM875.16.
Launched in August, Tabung Budi was started by a group of employees from Syabas and Puncak Niaga Sdn Bhd to help the poor, especially those whose accounts has been terminated due to non-payment.
Without a valid account, one cannot enjoy the free water given by the Selangor state government.
Under the charity programme, RM11.40 each will be deducted from the salary of participating employees and the money will be channelled to the families identified.
Currently, there are 1747 individuals who have pledged their free water rights into Tabung Budi and RM195,308.95 has been collected for the fund. The amount is expected to increase to RM261,948.55 with more pledges.
As of now, 11 families have received donations from the fund. They received 20 cubic meters of free water, settled arrears and free water for six months.
The selection criteria for recipients are water supply usage for domestic use only and the consumer would have to repair faulty internal piping if that was where the water wastage was from.
The consumer’s monthly bill payments would be based on their usual rate prior to the water reconnection and Syabas reserves the right to revoke the privilege if it finds evidence of wastage and improper water usage.
Ruslan said the company would go on with the funding scheme till it received a court order asking it to stop.
“This is an effort by the people for the people, from Syabas employees to the underprivileged. It’s from one rakyat to another, so we will continue with it for now as we are just facilitating the effort,” he said.
Earlier, the Selangor government has ordered Syabas to stop its Tabung Budi fund-raising campaign within 14 days under Section 12(2) of the Water Supply Act 1997 for breach of concessionaire agreement.
Mentri Besar Tan Sri Abdul Khalid Ibrahim said Selangor would ask the Federal Government to revoke Syabas’ concessionaire licence if the company collected the cost of the ‘’free water’’ that had been subsidised by the state government. - The Star
Hasma, who lives in Desa Pandan, Kuala Lumpur, was visited recently by Syabas chief operating officer Datuk Ruslan Hassan.
Her water bill arrears of RM596.29 were paid off and she also received free water for the next six months through the fund.
Hasma’s daughter Aisyah Mokhtar said she had to stop working four years ago to care for her ailing mother, who had to have her toe amputated due to diabetic complications.
“My niece’s husband, who was the family breadwinner, also passed away, so it has been difficult for us to take care of the bills.
“What I manage to make selling kuih is not sufficient as there are seven of us living in the house,” Aisyah said.
Also receiving help from the fund were Nor Haslina Mohamed Yunus whose arrears totalled RM333.38 and Loganathan Saminathan, who owed Syabas RM875.16.
Launched in August, Tabung Budi was started by a group of employees from Syabas and Puncak Niaga Sdn Bhd to help the poor, especially those whose accounts has been terminated due to non-payment.
Without a valid account, one cannot enjoy the free water given by the Selangor state government.
Under the charity programme, RM11.40 each will be deducted from the salary of participating employees and the money will be channelled to the families identified.
Currently, there are 1747 individuals who have pledged their free water rights into Tabung Budi and RM195,308.95 has been collected for the fund. The amount is expected to increase to RM261,948.55 with more pledges.
As of now, 11 families have received donations from the fund. They received 20 cubic meters of free water, settled arrears and free water for six months.
The selection criteria for recipients are water supply usage for domestic use only and the consumer would have to repair faulty internal piping if that was where the water wastage was from.
The consumer’s monthly bill payments would be based on their usual rate prior to the water reconnection and Syabas reserves the right to revoke the privilege if it finds evidence of wastage and improper water usage.
Ruslan said the company would go on with the funding scheme till it received a court order asking it to stop.
“This is an effort by the people for the people, from Syabas employees to the underprivileged. It’s from one rakyat to another, so we will continue with it for now as we are just facilitating the effort,” he said.
Earlier, the Selangor government has ordered Syabas to stop its Tabung Budi fund-raising campaign within 14 days under Section 12(2) of the Water Supply Act 1997 for breach of concessionaire agreement.
Mentri Besar Tan Sri Abdul Khalid Ibrahim said Selangor would ask the Federal Government to revoke Syabas’ concessionaire licence if the company collected the cost of the ‘’free water’’ that had been subsidised by the state government. - The Star
Monday, November 29, 2010
Water problem in Sg Way
RESIDENTS along Jalan SS9A/13 and Jalan SS9A/14 in Sungai Way, Petaling Jaya, are furious over the frequent water supply disruption due to pipe leakage in the area.
The worst incident was in July when Lee Weng Hoh’s house was flooded when a pipe burst just outside his house.
Lee said his roof and furniture in his living room area were damaged.
“When we woke up, we saw water shooting into the sky and spilling onto our roof,” said Lee, 62, who spent about RM600 on repairs.
Shoddy work: In Jalan SS9A/13, Sungai Way, small patches like these can be spotted in front of most houses as a result of burst pipes. Last week, Lee said water supply to his house was inconsistent and he had to ration water because he did not know when the supply would be cut off again.
Lee’s complaints were just one of the many forwarded to Seri Setia New Village chairman Ding Eow Chai.
Ding said each week he had to deal with seven to eight complaints ranging from burst pipes and low-water pressure to frequent supply disruption.
“The pipes here are old and when the pressure is increased, the pipes spring a leak,” he said during a visit to the area on Friday.
“When a pipe bursts, Syabas will repair only the affected section and resurface the road, leaving ugly patches in front of the houses,” Ding said at a press conference together with Kampung Tunku assemblyman Lau Weng San.
Lau said he had met the Syabas district manager but was informed that there were not enough allocation to replace the pipes along both the roads.
He said when the water pressure was low, residents could not use their washing machines or take a shower.
He hoped Syabas would replace the pipes in stages if the cost was high.
“If they start replacing the pipes area by area, over time they will be able to change all the pipes and satisfy the needs of their customers,” said Lau. - TheStar
Lee said his roof and furniture in his living room area were damaged.
“When we woke up, we saw water shooting into the sky and spilling onto our roof,” said Lee, 62, who spent about RM600 on repairs.
Shoddy work: In Jalan SS9A/13, Sungai Way, small patches like these can be spotted in front of most houses as a result of burst pipes.Lee’s complaints were just one of the many forwarded to Seri Setia New Village chairman Ding Eow Chai.
Ding said each week he had to deal with seven to eight complaints ranging from burst pipes and low-water pressure to frequent supply disruption.
“The pipes here are old and when the pressure is increased, the pipes spring a leak,” he said during a visit to the area on Friday.
“When a pipe bursts, Syabas will repair only the affected section and resurface the road, leaving ugly patches in front of the houses,” Ding said at a press conference together with Kampung Tunku assemblyman Lau Weng San.
Lau said he had met the Syabas district manager but was informed that there were not enough allocation to replace the pipes along both the roads.
He said when the water pressure was low, residents could not use their washing machines or take a shower.
He hoped Syabas would replace the pipes in stages if the cost was high.
“If they start replacing the pipes area by area, over time they will be able to change all the pipes and satisfy the needs of their customers,” said Lau. - TheStar
Rain Forecast For Northern, Eastern States
The Meteorological Department said in a statement today that the Tumpat, Kota Baharu, Bachok, Pasir Mas, Pasir Puteh, Machang, Tanah Merah, Jeli and Kuala Krai districts in Kelantan were expected to experience this condition between Sunday and Tuesday.
The Setiu, Kuala Terengganu, Hulu Terengganu and Marang districts in Terengganu were expected to experience a similar condition, it said.
It also said that the Kubang Pasu, Sik, Kota Setar, Pendang, Yan and Padang Terap districts in Kedah and the state of Perlis were expected to face such a condition from Monday to next Wednesday.
"The condition could cause flash floods in low-lying areas and those near river banks," it said.
The department said north-easterly winds of 40 to 50 km per hour and waves of up to 3.5 metres were expected in the waters of Condore, Reef North and Layang-Layang Island until Monday.
Similar conditions were expected in the waters of Samui (Kelantan and Terengganu), Labuan and Sabah from Friday to Monday.
The department warned that the strong winds and rough seas could be dangerous for small boats, recreational activities and sea sports.
-- BERNAMA
Pahang-Selangor Raw Water Project On Track
KUANTAN, Nov 24 (Bernama) -- Pahang Menteri Besar Datuk Seri Adnan Yaakob said the project to channel raw water from the state to Selangor has been going on smoothly and was expected to be fully completed in May 2014.
He said that until the end of last month, 17 per cent of the project had been carried out.
"Tenders have been called for all components of the project. Two of the tenders have been awarded and are being implemented while two others are expected to be awarded at the end of the year," Adnan said in reply to a question from Datuk Dr Ng Keong Chye (BN-Ketari) on the progress of the project at the Pahang state assembly sitting, here Wednesday.
The menteri besar said the two awarded components were the construction of a water supply tunnel and related works and the intake point, pumphouse and related works, all of which were on schedule.
The two other components to be awarded were the construction of the Kelau Dam and related works and the construction of mains and related works, he added.
When replying to a question from Datuk Aziz Mat Kiram (BN-Batu Talam) on illegal logging in Pahang, Adnan said the state government undertook enforcement measures, including patrolling sensitive areas by helicopter and using latest technology to detect timber theft. -- BERNAMA
He said that until the end of last month, 17 per cent of the project had been carried out.
"Tenders have been called for all components of the project. Two of the tenders have been awarded and are being implemented while two others are expected to be awarded at the end of the year," Adnan said in reply to a question from Datuk Dr Ng Keong Chye (BN-Ketari) on the progress of the project at the Pahang state assembly sitting, here Wednesday.
The menteri besar said the two awarded components were the construction of a water supply tunnel and related works and the intake point, pumphouse and related works, all of which were on schedule.
The two other components to be awarded were the construction of the Kelau Dam and related works and the construction of mains and related works, he added.
When replying to a question from Datuk Aziz Mat Kiram (BN-Batu Talam) on illegal logging in Pahang, Adnan said the state government undertook enforcement measures, including patrolling sensitive areas by helicopter and using latest technology to detect timber theft. -- BERNAMA
Selangor DAP Urges Federal Governmemt To Accept Water Offer From State Government
PETALING JAYA, Nov 28 (Bernama) -- The Selangor DAP has urged the federal government to accept the offer made by the state government to take over four water companies in the state in order to manage more effectively water supply services.
A resolution to the effect was passed at the party's 16th state convention here Sunday.
The four companies concerned are Puncak Niaga (M) Sdn Bhd (Puncak Niaga), Syarikat Pengeluar Air Selangor Holdings Bhd (Splash), Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) and Konsortium Abass Sdn Bhd.
Six other resolutions were also approved at the convention including one calling on the Selangor state government to carry out studies towards holding local authority elections and to improve the delivery system in the local authorities and state government agencies.
Besides these, Selangor DAP also called on the Selangor state government to allocate land for Chinese and Tamil national-type schools in order to overcome congestion in classes and shortage of such schools in certain parts of the state.
A total of 812 delegates attended the convention which was officiated by DAP veteran leader Lim Kit Siang.
-- BERNAMA
A resolution to the effect was passed at the party's 16th state convention here Sunday.
The four companies concerned are Puncak Niaga (M) Sdn Bhd (Puncak Niaga), Syarikat Pengeluar Air Selangor Holdings Bhd (Splash), Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) and Konsortium Abass Sdn Bhd.
Six other resolutions were also approved at the convention including one calling on the Selangor state government to carry out studies towards holding local authority elections and to improve the delivery system in the local authorities and state government agencies.
Besides these, Selangor DAP also called on the Selangor state government to allocate land for Chinese and Tamil national-type schools in order to overcome congestion in classes and shortage of such schools in certain parts of the state.
A total of 812 delegates attended the convention which was officiated by DAP veteran leader Lim Kit Siang.
-- BERNAMA
Possible Water Crisis In Selangor In 2012 - Syabas COO
PETALING JAYA, Nov 26 (Bernama) -- Come 2012, Selangor could face a water crisis if the stakeholders involved in water management failed to come up with early solutions, said Syarikat Bekalan Air Selangor (Syabas) chief operating officer Datuk Lee Miang Koi.
He said that based on Syabas' calculation, households in the state were using 212 litres of water per person daily, which was quite high as compared to other countries.
"Singapore, for example, only consumes 156 litres daily per person. In addition, the water demand, especially in developed states likes Selangor, keeps increasing from year to year," he said.
Lee was speaking at the Selangor Water Forum entitled 'Water Demand Management' here Friday.
The forum was jointly organised by University Teknologi Mara, University Malaya and Water Association of Selangor, Kuala Lumpur and Putrajaya.
Lee said, in term of revenue, the industrial sector in the state was paying more than the domestic because the rates were different, with the former contributing 65 per cent.
-- BERNAMA
He said that based on Syabas' calculation, households in the state were using 212 litres of water per person daily, which was quite high as compared to other countries.
"Singapore, for example, only consumes 156 litres daily per person. In addition, the water demand, especially in developed states likes Selangor, keeps increasing from year to year," he said.
Lee was speaking at the Selangor Water Forum entitled 'Water Demand Management' here Friday.
The forum was jointly organised by University Teknologi Mara, University Malaya and Water Association of Selangor, Kuala Lumpur and Putrajaya.
Lee said, in term of revenue, the industrial sector in the state was paying more than the domestic because the rates were different, with the former contributing 65 per cent.
-- BERNAMA
Selangor’s bad water debt can impact ETP, say economists
KUALA LUMPUR, Nov 19 — The Najib administration’s ambitious Economic Transformation Programme (ETP) may be off to a shaky start as the spectre of defaulting Selangor water bonds threatens to cast its pall over the broader bond market.
Selangor water concessionaires, which are already in technical default owing to the shortfall of money in the reserve account, are inching closer to debt service default as several water bonds approach maturity.
The Malaysian Insider understands that the reserve account, meant to hold at least six months’ worth of bond repayment money, is currently short by some RM50 million. This shortfall may double in six months if the current water consolidation impasse remains unresolved.
RAM Ratings chief economist Dr Yeah Kim Leng said a default will have “very wide” market implications on the bond market, expected to finance at least 70 per cent of the ETP — particularly long-term, capital-intensive projects — through long-term issuances.
“In the event of a default... it will trigger a cross-default among other borrowings,” he said.
“It’s not good, given that the bond market now has become the major form of financing.”
Yeah said such an event will also threaten the future of water industry privatisation, which has long been on the books for Minister of Finance Inc’s wholly-owned Pengurusan Aset Air Bhd (PAAB).
“It affects not just the confidence in the bond market but the future of water concessionaires’ privatisation of the water industry,” he said.
PAAB had said in July that it intended to complete the RM3 billion takeover of water assets in Perlis, Perak, Kelantan and Pahang by year-end. The company had also hoped to take over Selangor’s RM10-12 billion water assets by the same time.
Lower confidence in the bond market in general, and water bonds specifically, will throw a spanner into PAAB’s plans to assume control of water assets in several states, spearheaded by a RM20 billion sukuk programme by CIMB Bank.
An analyst at a local investment bank agreed, and said defaulting bonds will “give some negative perspective” to investors looking to pick up long-term issuances, even if they are government-backed.
“End of December, if nothing solid comes from these parties, there’s going to be another downgrade,” he said.
“In future, it’ll be hard to gain investor confidence in the bond market. Financing the ETP through bonds might not be as cost effective in the event of a default as banks were likely to charge higher interest rates due to increased uncertainty over debt repayment,” the analyst said.
He added that refinancing and rescheduling of the bonds could buy some time for the water players but cautioned that this was only a stop-gap measure until the political deadlock in Selangor is broken.
OSK Research head of research Chris Eng, however, did not believe the potential water bonds default would adversely affect the ETP.
“That is a long tenuous connection to make... I don’t think it will directly impact the ETP,” he said.
He did not think there would be a major sell down of other bonds due to defaulting Selangor water bonds, pointing out that the market had been aware of debt payment concerns “for some time now”.
Eng added that the first round of issuances raised for ETP projects like the Mass Rapid Transit (MRT) will most likely be government-backed ones which will serve to assuage doubts about the local bond market.
“By the time the next round (of bonds) comes around, there will be less concerns,” he said.
Indebted Selangor water firms should ask to be bought, says Pua
November 20, 2010
PETALING JAYA, Nov 20 — Selangor water concessionaires faced with the prospect of debt service default from maturing bonds should be “begging” the state government to take over their assets, Selangor DAP leader Tony Pua said today.Pua’s remarks were made at a water ceramah today as part of the Selangor government’s campaign against a potential bail-out of the state’s privatised water industry.
“The natural process is that these water concessionaires should be coming to us (the Selangor government) and begging us to take over their assets,” said the DAP national publicity secretary.
“If these companies fail to pay the bondholders, the bondholders have the right to take over the companies. Then the state government can talk to them and offer to take over their assets,” he added.
Selangor plans to submit a memorandum to the Yang di-Pertuan Agong on December 5 over the federal government’s possible multi-million ringgit bailout of Syarikat Bekalan Air Selangor (Syabas).
Sources told The Malaysian Insider recently that Selangor water bondholders will urge Prime Minister Datuk Seri Najib Razak to intervene directly in the state’s water restructuring deadlock in an effort to safeguard their bonds from being further downgraded.
The Malaysian Insider understands that major bondholders — including CIMB Principal Asset Management, Hong Leong Investment Bank and Great Eastern Life — have drafted a joint letter to Najib asking the federal government to bail out Syabas with a soft loan worth some RM1 billion.
“The only thing we can do is to protest the bailout,” said Pua.
The Petaling Jaya Utara MP also noted that it was uncertain if the federal government intended to simply issue a RM1 billion bailout, or if it also wanted to take over the water industry’s debts amounting to some RM6 billion.
“Whether they give RM1 billion or take over the entire RM6 billion, we don’t know,” said Pua.
“Puncak Niaga Sdn Bhd (PNSB)’s net debt is RM1.3 billion, Syabas’s is RM2.9 billion, Splash’s (Syarikat Pengeluaran Air Sungai Selangor Sdn Bhd) is RM1.6 billion and Konsortium ABASS is RM640 million. The total is RM6.4 billion,” added the lawmaker.
Selangor’s water players — Syabas, PNSB, Splash and Konsortium ABASS — are at risk of debt payment default as water bonds approach their maturity dates.
The debt service problem started when Syabas was barred from implementing a 37 per cent tariff hike agreed upon in January 2009, after the Selangor government claimed the sole water distributor had not done enough to reduce leakages which cost the state millions.
This in turn led to payment problems between Syabas and water treatment concessionaires PNSB, Splash and Konsortium ABASS, who supply it with treated water.
Selangor water concessionaires are also already in technical default owing to the shortfall of money in the reserve account.
The Malaysian Insider understands that the reserve account, meant to hold at least six months’ worth of bond repayment money, is currently short by some RM50 million.
This shortfall may double in six months if the current water consolidation impasse remains unresolved.
Recently, analysts have warned that a default on the Selangor water bonds will have “very wide” market implications on the bond market, expected to finance at least 70 per cent of the Economic Transformation Programme (ETP) — particularly long-term, capital-intensive projects — through long-term issuances.
They have also said that the default, which may trigger a cross-default among other borrowings, could threaten the future of water industry privatisation.
Today, Klang MP Charles Santiago said that Selangor Mentri Besar Tan Sri Khalid Ibrahim has begun sourcing for experts to manage the state’s water industry in the event of a takeover.
“During the last five to six months, the mentri besar has started looking for a new alternative management...(who are) not only from Malaysia but also outside Malaysia,” said Santiago.
When asked about the number of signatures on Selangor’s planned memorandum to the Yang di-Pertuan Agong to date, Tricia Yeoh, research officer to the Mentri Besar, answered: “We haven’t taken stock of all the signatures yet.”
The state government is fighting for the rights over the water industry and promised to provide the first 20 cubic metres water for free and maintain 12 per cent increase in water tariff, compared to Syabas’ plans of a 25 per cent increase in 2012 and a 20 per cent increase in 2015.
MB wants Syabas licence withdrawn
SHAH ALAM, Nov 22 — The licence of Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) should be withdrawn if it is found to collect the cost of 20 cubic metres of subsidised water for Tabung Budi.
Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim said Syabas had no right to collect the money from water consumers who benefited from the state government subsidy.
“Consumers wishing to donate cost of water subsidy should return them to the state government and not Syabas as it is state money meant for the people.
“We want the licence given to Syabas withdrawn for failure to honour the water privatisation agreement,” he told reporters after attending Selangor government monthly gathering and Innovation Day celebration here today.
Khalid (picture) said that he would discuss the matter with the State Legal Adviser and finance officers as the agreement did not state that Syabas could collect the subsidy.
Tabung Budi allows consumers to waive their right to 20 cubic metres of free water worth RM11.40 monthly and return it to Syabas.
Syabas said the money would be used to reconnect the supply of those denied water for failing to settle their bills.
Describing the move as hypocrisy, Khalid said that Syabas was not charged with caring for the welfare of the people.
“I will write to Syabas asking whether it is against the privatisation agreement signed in 2004,” he added. — Bernama
Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim said Syabas had no right to collect the money from water consumers who benefited from the state government subsidy.
“Consumers wishing to donate cost of water subsidy should return them to the state government and not Syabas as it is state money meant for the people.
“We want the licence given to Syabas withdrawn for failure to honour the water privatisation agreement,” he told reporters after attending Selangor government monthly gathering and Innovation Day celebration here today.
Khalid (picture) said that he would discuss the matter with the State Legal Adviser and finance officers as the agreement did not state that Syabas could collect the subsidy.
Tabung Budi allows consumers to waive their right to 20 cubic metres of free water worth RM11.40 monthly and return it to Syabas.
Syabas said the money would be used to reconnect the supply of those denied water for failing to settle their bills.
Describing the move as hypocrisy, Khalid said that Syabas was not charged with caring for the welfare of the people.
“I will write to Syabas asking whether it is against the privatisation agreement signed in 2004,” he added. — Bernama
Cancel Tabung Budi or lose licence, Selangor tells Syabas
SHAH ALAM, Nov 23 — Selangor has warned Syabas to cancel its Tabung Budi fund within two weeks or risk losing its water distribution licence.
Selangor Mentri Besar Tan Sri Khalid Ibrahim said the sole water distributor’s Tabung Budi scheme was a violation of the water concession agreement.
“According to this notice, the water distribution licence which was given to Syabas under subsection 12(3) of the Water Supply Enactment 1997 will be withdrawn if Syabas fails to cancel the (Tabung Budi) programme,” said Khalid (picture) in a statement today, referring to the cancellation notice that was issued to Syabas by Selangor Water Regulatory Department director Nor Azmi Diron today.
“The Selangor government sent a notice to Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) to stop the Tabung Budi programme because it violates conditions in the water concession agreement,” he added.
The fund, which was launched last month, allows Selangor residents who wish to waive their right to free water pay for the 20 cubic metres they receive gratis from the state every month, valued at RM11.40. Syabas then uses the money collected to help other residents who have no access to clean water.
Recently, Selangor has said that collecting money from those who wish to pass their entitlement to those more deserving was akin to double-billing the state for the same water, as the state government pays Syabas in full for the free water at RM11 million a month.
Today, the Khalid administration also told Syabas to inform it about the cancellation of the programme.
“Besides stopping the programme within 14 days, Syabas is required to inform the Selangor government about the cancellation. The cancellation must also be announced in major newspapers in Malaysia,” said Khalid.
“The notice reminds Syabas that as a licence holder, the company can only collect and keep the charges (water arrears) that are still owed by the users in the water supply area,” he added.
He stressed that Syabas did not have the right to collect public donations to pay for water arrears through the Tabung Budi fund.
Khalid further accused Syabas of abusing public funds besides violating the water concession agreement.
“Syabas claims that this programme is for charity, but the reality is that Syabas is using public funds for its personal interests,” he said.
The mentri besar pointed out that Selangor paid Syabas for the free water each month through water concessionaire Kumpulan Darul Ehsan Berhad (KDEB) while Syabas was collecting money from the public.
“If Syabas was truly sincere about fulfilling its corporate social responsibility, it should get rid of water charges and water arrears that are borne by those who can’t afford it,” he said.
Recently, Syabas has said the Tabung Budi would help those whose water supply had been disconnected due to unpaid bills settle arrears and get back on the grid.
The water concessionaire has also said that while the Tabung Budi account was managed by Syabas’s staff association, an independent special select committee will decide who gets help. It will comprise members of the public, non-governmental organisations and Syabas officials.
A total of 11 households in Selangor have received assistance since the fund’s inception on August 24 as an internal Syabas and Puncak Niaga (M) Sdn Bhd initiative. The fund has collected over RM350,000 to date, according to Syabas.
The big rod on Syabas — Sakmongkol AK47
NOV 26 — Let’s just be blunt: The Eurozone’s bailout programme has failed. It’s not solving the underlying causes of the European debt crisis; it might even be making matters worse.
The above is a quote I read on an assessment of what happened in Ireland recently. Ireland is seeking a bailout from the European Union and IMF.
So let’s also be blunt. The government shouldn’t be bailing out private businesses even if they are owned by Umno supporters who went on to form BAPAK. Rozali Ismail is a fat cat, happy and contented. Mazlan Aliman is lean and has got that dangerous hungry look.
Syabas or Puncak Niaga does not need an Ireland-style rescue. If the government steps in, it should go in IMF style. Bring the big rod and don’t be shy about using it. Replacing Rozali Ismail, for instance, would be a good initial measure.
The textbook strategy, perhaps dished out by people at Khazanah which is essentially Mckinsey-esque through and through, so far has been simple: Put up rescue funds, demand reforms in the management and hope those steps rebuild confidence in financial markets that people like Syabas can pay back their giant debts.
This kind of approach is meant first and foremost as a confidence-building measure only, so bondholders could be assured that enough cash is at hand to make them whole, no matter what happens in Selangor or elsewhere for that matter.
Why will this bailout strategy fail? Because investors don’t believe it is viable. The strategy is predicated on the notion that the companies receiving bailouts can fix their finances sufficiently enough to restore confidence in their ability to pay their debts. That means Syabas and whoever leads the consortium have to implement steep budget cuts and other austerity measures. Clearly, they have been incapable of doing so — they have been spending like wild men, that is why they are facing this problem now. Gentle persuasion is not working.
How about cutting Rozali Ismail’s humongous salary first if he stays on? He gets paid over RM400k a month and he sets up a fund for those who have overpaid to contribute to help out those who can’t pay. Why doesn’t he volunteer cutting his salary by 50 per cent and give it to the fund? Or give him a golden handshake?
But if we do that (the gentle persuasion or feather-teasing method) it will only further depress an already depressed business. Even if Umno politicians can muster the political will and authority to sustain those policies — and that’s a big if —- there’s no guarantee they will work to turn the business around. In fact, the bailout-mandated cuts, by suppressing growth, may make it even harder for Syabas and its cohorts to repair their financial position and pay their creditors. So investors don’t believe that the bailout programmes are ensuring they’ll get their money back. That keeps the fear of eventual debt restructurings, in which bondholders share the losses, or even worse, defaults, very much alive.
The instinct of investors under these circumstances is to sell the bonds of weak businesses. Stopping this cycle of fear and crisis won’t be easy. Investors have to be convinced that their money is safe as Syabas bonds.
How can we correct the situation? The government moves in to discipline the errand boys. It has to address the problem with more than budget cuts and bailouts. Syabas and the others all have to get their fiscal deficits under control and stabilise debt levels. What were the causes of overspending in the first place? Huge operating costs? Losses? Corruption of non-water revenue leakages? Blind slashing with a hatchet can’t be the sole method.
Make Syabas tackle its debt problem more proactively, not wait until the edge of the abyss to call the government to step in, but getting ahead of the markets and putting in place reform-based bailouts. How so? Make it mandatory for them to allocate funds into the reserve fund. Clearly, this requirement has been violated because perhaps putting reserve funds has been voluntary. Otherwise, if it has been mandatory all this while, then monitoring it has been lax or some people have been paid to look the other way.
We can’t just put up some cash for a bailout and let Syabas go about its business as usual. Putting in bailout money is going to place heavy political pressure. The public is asked to be frugal while our tax money is directed to helping people like Rozali Ismail.
* This is the personal opinion of the writer or the newspaper. The Malaysian Insider does not endorse the view unless specified.
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