Selangor Menteri Besar Tan Sri Khalid Ibrahim said the decision was made under the power provided in Clause 32 of the concession agreement and that "stepping in is part of the concession agreement and is permitted".
"We have the documentation for the take over," he said, adding, however, that the state government would send a letter seeking approval from the federal government and the National Water Services Commission (SPAN).
"I will announce the decision of the federal government next week," he told reporters here today.
Abdul Khalid said if there were still no feedback after 14 days, the state government would consider other alternatives such as taking court action.
The Menteri Besar said the decision was made because Syabas owed the operator of the water treatment plant arrears totalling about RM2.8 billion as of April this year.
Syabas had also failed to reduce the rate of non-revenue water to 20 per cent and the preliminary audit report revealed that Syabas had not implemented its capital expenditure exercise properly.
Abdul Khalid said the state government had sent letters to the federal government on Dec 19, 2008 and Jan 21, 2011 to revoke the concession agreement.
"As the federal government did not give any feedback on the letters, the state government had decided to give a notice to the federal government for the state government to step in on the operations of Syabas," he said.
Meanwhile, he doubted the announcement on the proposed water rationing by Syabas because he claimed that the state water regulator, Datuk Nordin Sulaiman and the members of the board of directors of Syabas had not been informed of the matter.
Abdul Khalid said the problem of water shortage should not have arisen and, as such, the state government had asked the State Secretary together with Nordin to monitor the water services provided by Syabas.
"This committee will ask Syabas to provide daily reports to explain the current water situation," he said.
He said Konsortium Abass Sdn Bhd would also be asked to join the committee whereby the company would call up three consultants; namely Halcrow, Wessex Water and Suez Environment as well as an independent expert with experience during the water crisis in 1998 to monitor the validity of the report and information provided by Syabas.
"It must be emphasised here that the present situation cannot be likened to the water crisis in 1998 because the seven dams in the state of Selangor have adequate water capacity and are overflowing," he said, urging that the restructuring process for the water industry must be continued immediately.
Abdul Khalid said the state government would also continue with the efforts to find alternative water sources such as groundwater and raise the capacity of the existing water treatment plants by adopting the latest technology.
When asked on the action to be taken by the state government if water rationing were implemented, Abdul Khalid replied: "We have options, we will see how much raw water is needed for us to put in for treatment. We will be advised by Suez Environment and Halcrow on how to increase the supply".
Last Saturday, Syabas chief executive officer (CEO) Datuk Ruslan Hassan confirmed that the water supply crisis had already occurred in Selangor, Kuala Lumpur and Putrajaya as the treated water production capacity from the Water Treatment Plant could not meet the demand for water lately.
"The spike in demand caused water levels to dip sharply at several main reservoirs because existing clean water reserves are less than three percent.
"The ensuing low water pressure disrupted supply to some areas such as Petaling, Klang, Kuala Lumpur and Hulu Langat involving 209,678 accounts, affecting about half a million residents," he explained.
The media had previously reported that about 1.8 million consumers in several areas in Selangor, Kuala Lumpur and Putrajaya would experience a water crisis if the Raw Water Supply Project from Pahang to Selangor, and the Langat 2 Water Treatment Plant were not completed by 2014.
Ruslan urged the Selangor and Central governments to urgently discuss the construction of the Langat 2 plant as scheduled.
Syabas was set up on July 8, 1996 under the Companies Act 1965 to take over the responsibility of supplying water to consumers in Selangor, Kuala Lumpur and Putrajaya from Perbadanan Urus Air Selangor under the privatisation policy.
It was appointed by the State and Federal Governments to upgrade and enhance the water supply system and services in Selangor under the privatisation concept in view of the previous management's financial constraint, ineffective management, poor water quality standards and inconsistent supply of treated water.
Syabas was granted a concession by the Federal Government and the Selangor State Government to manage, operate and distribute quality clean water for a period of 30 years, commencing on Jan 1, 2005.-- BERNAMA
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