LRAL2 Ready By 2017 - Ongkili

The construction of the Langat 2 Water Treatment Plant (Langat 2) and its distribution system (LRAL2) is expected to be ready by 2017, said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili.

He said the Selangor state government would issue a development order for the construction of the LRAL2 today and all the approvals related to the project development would be approved within 30 days from the date the memorandum of understanding (MoU) on it was signed.

"The authorisation for the first six projects have just been submitted and work will start as soon as possible.

"LRAL2 is expected to be completed in less than 39 months or three years. During that time, a mitigation project needs to be undertaken and the state government needs to have a supplementary programme," he told a media conference after the MoU signing ceremony between the federal government and Selangor state government on the restructuring of the water industry in Selangor, here today.

Ongkili said the federal government had allocated RM900 million for the mitigation project that would be implemented without delay.

The MoU was signed by Ongkili, who represented the federal government while the state government was represented by its Menteri Besar, Tan Sri Abdul Khalid Ibrahim.

The historic moment, which took place at the Perdana Putra Complex here, was witnessed by Prime Minister Datuk Seri Najib Tun Razak, Deputy Prime Minister Tan Sri Muhyiddin Yassin and Chief Secretary to the Government Tan Sri Dr Ali Hamsa.

LRAL2 is a long-term measure to ensure continual water supply in Selangor, Kuala Lumpur and Putrajaya.

However, the project was stalled after the federal government and Selangor government failed to reach an agreement on the restructuring of the water industry in the state, including the acquisition of the water concession companies through the 'willing buyer, willing seller' concept.

With the MoU, Abdul Khalid said the Selangor government via its subsidiary, Kumpulan Darul Ehsan Bhd (KDEB), would acquire four water concession companies in Selangor at a cost of RM9.65 billion.

The four concession companies are Puncak Niaga Sdn Bhd, Syarikat Bekalan Air Selangor Sdn. Bhd (Syabas), Syarikat Pengeluar Air Selangor Sdn Bhd (Splash) and Konsortium ABASS Sdn Bhd.

He said the acquisition process would take a period of three months.

"Out of the acquisition, RM1.79 bilion is payment for equities owned by the concession companies while RM7.8 bilion is for loans and bonds in the concession companies that will be settled by the national water asset management while the water restructuring will pay off the debts owed by the concession companies," he said.

Besides that, he said, the federal government injected RM2 billion additional funds to the Selangor government to settle equity payments.

Abdul Khalid gave assurance that the acquisition would not jeopardise the workers and management at the four concession companies.

"It only involves asset restructuring. Thus, there will be no layoffs and this is one of the matters that was agreed to," he said.

Meanwhile, Abdul Khalid said, as a short-term measure to address the water shortages, the state government had identified one site to build a water reservoir to increase raw water supply exceeding 600 million litres a day at Bestari Jaya area in Kuala Selangor.

"With this, the residents in Selangor, Kuala Lumpur and Putrajaya will get water supply and they need not worry about not having water after the construction of the LRAL2 is ready," he said.

Abdul Khalid said the Selangor state government, which acquires the four water concession companies, would improve non-revenue water to 27 percent.

-- BERNAMA