Selangor is now willing to pay up to RM9 billion for the assets of all four water concessionaires in the state before selling all assets to the federal government.
The national water industry restructuring scheme has been delayed by a dispute over the price of the privatised assets in Selangor, which also provides water to the federal territories of Kuala Lumpur and Putrajaya.
Selangor Mentri Besar Tan Sri Khalid Ibrahim said today the new offer was made to the four water concessionaires in Selangor — Puncak Niaga (M) Sdn Bhd (PNSB), Bekalan Air Selangor Sdn Bhd (Syabas), Konsortium Abass Sdn Bhd (ABASS) and Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH).
“The state government is offering a 100 per cent takeover of the companies’ shares — RM64.62 per share for PNSB, RM20.78 per share for Syabas, RM5.95 for SPLASH and RM9.39 for ABASS.
“In total, over RM9 billion will be offered to own the equities of water operations in Selangor,” he said.
Khalid said the state government’s decision today was an “important” step in solving the issue of water management in the state, adding that the proposed takeover will involve the transfer of water assets in the state to Putrajaya’s Pengurusan Aset Air Berhad (PAAB).
“The offer documents have been sent today. The documents have been prepared by the state government following international standards and fulfilling the requirements of the Securities Commission (SC),” said Khalid.
He claimed that the total water assets in Selangor were currently worth more than RM10 billion, which the previous state administration had never taken into account when agreeing to the privatisation of the water industry in Selangor.
“The Selangor government would like to stress again that our approach follows the Water Service Industry Act 2006 as well as the national water policy — that the water industry service right now is in shambles. There is a need to unite the industry and for it to be managed in a holistic manner by the state government.
“The restructuring of the water industry in Selangor following the problems which have arisen out of this issue proves that privatisation efforts in the state have failed. Our offer and negotiations show our commitment in solving the problem,” said Khalid.
He also said that under the new offer, water concessionaires could bring up any dispute to an international arbitration court.
According to Khalid, Selangor had informed Putrajaya of this offer and of the option for water concessionaires to address concerns in an international court.
“Unfortunately, the federal government does not agree with our methods,” he said.
The Malaysian Insider had reported last month that Selangor will offer about RM5.7 billion to acquire the remaining state water assets, while leaving its present owners to pay off their own liabilities.
Selangor, which already owns 80 per cent of the state’s water supply assets, is preparing to take over the remaining assets after Putrajaya said it did not object to direct negotiations between the state government and concessionaires.
Selangor intends to retain management of the water assets, which also cover the federal territories of Kuala Lumpur and Putrajaya. A project to get water from Pahang has also been delayed because of the issue.
The state government has made two previous offers for the water assets. The first offer, RM5.7 billion for assets and equity, was turned down by all four players, while the second RM9.4 billion offer — this time including liabilities — was rejected by Syabas and sister company PNSB.
Both Syabas and PNSB are controlled by Puncak Niaga Holdings Bhd (PNHB) which belongs to executive chairman Tan Sri Rozali Ismail, who is Selangor Umno treasurer and the 31st richest man in Malaysia, according to Forbes.
The two-year water restructuring saga has been characterised by finger-pointing by water players, federal and state governments keen on deflecting blame for the deadlock.
The impasse began soon after parties that formed the Pakatan Rakyat (PR) unexpectedly took control Selangor, Malaysia’s richest state, in the last general election. Since then, privatisation plans for the water industry have been put in deep freeze as federal and state governments engage in what industry watchers have called “excessive politicking”.
Control of Selangor’s water assets is important to PR so it can set tariffs and fulfil its campaign promise of free water for all residents in the state. Barisan Nasional, however, appears bent on preventing PR from using water to score political points with the electorate. - Malaysian Insider
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