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Selangor govt cries foul

PETALING JAYA, 19 Feb 2009: The Selangor government is crying foul over being by-passed in the restructuring of the state’s water supply services.

Menteri Besar Tan Sri Khalid Ibrahim has accused the National Water Services Commission (SPAN) of siding with private concessionaires by allowing direct negotiations between Pengurusan Aset Air Bhd (PAAB) and the four concessionaires to acquire the concessionaires’ water treatment and distribution assets.

The state government, through its investment arm Kumpulan Darul Ehsan Bhd (KDEB), was to have acquired the assets and later sell them to the Finance Ministry-owned PAAB. PAAB would then lease the assets back to KDEB, which would then become the sole concessionaire for water treatment and distribution in Selangor.

Khalid said this restructuring of the state’s water supply services was initially agreed to by the federal government on 16 Jan 2008. The agreement was to let KDEB take over the operation and maintenance of water assets.

“It has therefore come as a shock to learn that SPAN is embarking on an obvious ‘U-turn’ to the federal government’s earlier decision,” Khalid said in a press statement today.

SPAN is a federal-level body set up to regulate the water industry, including overseeing the restructuring of water assets in the states.

“Instead of supporting the state government’s initiative to buy back these water concessions in the interest of the rakyat with our fair and reasonable offer, SPAN appears to be pandering towards the interest of private concessionaires,” he said.

Khalid said SPAN chief executive officer Datuk Teo Yen Hua should declare any personal interest he has in the matter. “If any irregularity is found, we call for his resignation,” Khalid said.

Teo announced yesterday that PAAB would be making an offer to take over water assets from the four concessionaires — Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH), Puncak Niaga Sdn Bhd, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), and Konsortium ABASS Sdn Bhd.

KDEB’s offer of RM5.7 billion to the four concessionaires is said to be too low.

The deadline for KDEB to take over the water assets and transfer then to PAAB is 31 March.

According to Teo, the federal government had extended KDEB’s deadline twice — first in September 2008 and then on 14 Feb this year.

However, Khalid said KDEB’s letters of offer to the concessionaires, dated 13 Feb, were to expire tomorrow. This is still ahead of the 31 March deadline.

“The decision undermines both the federal and state constitutions, and federal-state relations,” Khalid said in a press statement.

Direct negotiations between PAAB and the concessionaires are also “completely inconsistent” with the spirit of the Water Services Industry Act (WSIA) 2006 that state governments are to lead water industry restructuring in their respective states.

“It is not consistent with provisions of section 191(4) of the WSIA that require the concessionaires to negotiate with both the federal government and the Selangor government,” Khalid said.

He said SPAN’s decision will affect consumers of Selangor and Kuala Lumpur because of higher water tariffs.

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