The federal government's proposed RM6.5bil bailout of Selangor's privatised water companies has killed off any remaining possibility of the state government striking a deal with these companies to restructure and take over the water industry in Selangor.
"The debts of these water companies were at risk of default after they were unable to meet their installment earlier this year.
"The failure of these companies to service their debts, had no bailout been offered, would have necessitated these companies to come to the table and negotiate the terms of restructuring with the Selangor state government or other parties which has made offers to acquire the businesses and assets," said Petaling Jaya MP Tony Pua in a statement Tuesday.
He said the state government has made a third offer amounting to RM6.3bil into acquire these water companies, and taking over their debts obligations.
In addition, the state government was able to ensure that there would be no water tariff hikes post restructuring.
"However as a result of the Federal Government bailing out the massive debts, they have relieved these companies of their cash flow problems. This will mean that there is now no urgency for these companies to agree to any form of restructuring as desired under the Water Services Industry Act (2006) as they now have the upper hand at the negotiating table at the expense of the rakyat," Pua added.
"The result is clearly a loss for the people of Selangor, for they have lost an opportunity for the privatised water industry to be truly restructured to ensure quality water prices are to be provided at the lowest possible prices," he said.
Pua also urged Energy, Water and Green Technologies Minister Datuk Peter Chin to immediately provide clarification for the move to bail out the debts of the water concessionaires before a restructuring deal was finalised, and to fully disclose the means and terms of repayment to the Government by these concessionaires with the Government taking over these debts. - THESTAR
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