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Progress in Selangor’s water negotiations

PETALING JAYA, 1 July 2009: Konsortium Abass Sdn Bhd (Abass)’s acceptance of the Selangor government’s offer to buy its water-related assets for RM946 million is a sign of progress in the state’s efforts to restructure its water services industry.

“The state government would like to thank Abass for its decision which has taken the state a step closer towards providing better and cheaper water services for the people of Selangor, Kuala Lumpur and Putrajaya,” Menteri Besar Tan Sri Abdul Khalid Ibrahim said in a statement today.

The Selangor government is still in negotiations with three other water concessionaires namely, Puncak Niaga (M) Sdn Bhd (PNSB), Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), and Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash).

The Edge Financial Daily reported yesterday that all three had rejected the state’s latest offer even though it agreed to absorb their related liabilities.

However, Khalid said he was “generally satisfied” with the state of the negotiations and hoped to conclude negotiations with Splash and Syabas soon.

The Selangor government is resolving an issue involving sub-contracts with Splash, and is waiting for the federal government to approve the offer made to Syabas, according to Khalid’s statement.

PNSB is the only concessionaire that has conclusively rejected Selangor’s offer. But “this development will not derail the state government’s restructuring efforts,” Khalid said.

Despite the progress with Abass, the state government’s restructuring efforts could still be derailed for a different reason.

Selangor has missed the federal government’s deadline for the conclusion of negotiations.

Energy, Green Technology and Water Minister Datuk Peter Chin Fah Kui ordered the negotiations to be concluded on 30 June 2009.

The federal government could choose to go ahead with its original plan of nationwide water asset consolidation with Pengurusan Aset Air Bhd (PAAB). The concessionaires might choose to hold out for a better offer from PAAB.

Selangor’s next step will be to discuss the situation with the minister, according to Khalid’s statement.

“Although there are many technical issues to be resolved, the state is optimistic about the outcome,” he said.

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