Puncak Niaga Sdn Bhd and Syabas said yesterday they could not make a decision on the Selangor mentri besar’s offer, claiming that the offer was filled with ambiguities.
“If they feel our offer is not a fair one, we are willing to go for arbitration,” Khalid told reporters today.
Khalid said recently that Selangor has made a new offer of RM9 billion for the assets of the four water concessionaires in the state — Syabas, Puncak Niaga Sdn Bhd (PNSB), Syarikat Pengeluaran Air Sungai Selangor Sdn Bhd (Splash) and Konsortium ABASS — before selling all assets to the federal government.
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’s four water players 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.
Khalid insisted today that Selangor’s offer must be accepted by all four water companies.
“We want to make sure that there’s a total restructuring of the water industry,” said Khalid.
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.
It intends to retain management of the water assets, which also cover the federal territories of Kuala Lumpur and Putrajaya.
The state government has made two previous offers for the 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.
The two-year water consolidation impasse began soon after the loose federal opposition pact unexpectedly took control of 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 call “excessive politicking”.
PR wants to control the state’s water assets so it can fulfil its promise to keep water cheap for Selangor residents by controlling tariffs.
“The cheaper to get (the water companies), the better for the people of Selangor,” said Khalid today.- Malaysian Insider
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