THE Selangor state government made an offer on 13 Feb 2009 to four privatised water service providers — Puncak Niaga Sdn Bhd (PNSB), Syabas, SPLASH and Abass — to acquire their water assets and concessions.
The combined RM5.71 billion offered was made with the objective of delivering the lowest possible water tariffs for Selangor and Kuala Lumpur residents. At the same time, the offer was consistent with, and guided by, the terms and conditions specified in the concession agreements signed willingly by all parties involved.
It was a comprehensive offer because it encompassed the audited asset value of all water-related assets, as well as a very fair and reasonable return to the capital invested by the respective concessionaires.
However, before the concessionaires were able to respond to the state government’s offer by 20 Feb, we were shocked that the Energy, Water and Communications Ministry, via Datuk Teo Yen Hua, the CEO of the National Water Services Commission (SPAN), announced on 18 Feb that the federal government would proceed to negotiate directly with the water concessionaires.
Instead of supporting the state’s offer, SPAN intentionally threw a spanner in the works to sabotage the Selangor state’s attempt at delivering the lowest possible water tariffs to the people.
(Pic by thiagofest / sxc.hu) With an alternative competing offer that will not only encompass higher cash valuation but also more lucrative terms and conditions from the federal government, SPAN has single-handedly destroyed any likelihood of a positive response from the concessionaires to the state government. It was not surprising that the concessionaires rejected the state government’s offer on 20 Feb.
We would like to call upon the minister to explain his ministry’s actions in sabotaging the efforts of the Selangor government.
We would also like to reiterate our position that if the offer from the federal government to acquire these assets and concessions is at the same price or lower than what the Selangor government has offered, we will not only agree to let the federal government lead the negotiations, but we will also provide the ministry with our full support and cooperation.
If, however, the ministry offers the concessionaires a much higher cash value for its assets as well as lucrative licence terms for them to continue as the water operators in the state, the minister must explain why he is forsaking the rights and interest of the 7.3 million Selangor and Kuala Lumpur population.
We would also like to emphasise to the minister that under the law, particularly the Water Services Industry Act 2006, as well as the terms of the current concession contracts, the Selangor state is a counter party to all previous and future agreements.
Hence, the attempt by the federal government to unilaterally negotiate with the concessionaires is illegal and will be subjected to future dispute and complications.
Therefore, we call upon the federal government to respect the rights of the state, and let the Selangor government proceed with the negotiations with the concessionaires in the interest of the people of Selangor and Kuala Lumpur.
Tony Pua, MP Petaling Jaya Utara
Charles Santiago, MP Klang
William Leong, MP Selayang
Dr Dzulkefly Ahmad, MP Kuala Selangor
On behalf of the Selangor Water Review Panel
Kuala Lumpur, 23 Feb 2009
See also:Selangor govt cries foul
S’gor reiterates RM5.9bil offer