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Water fight

“The Selangor government can remain in the existing regime but it will have to bear the implications of that decision … We have stated that if anything happens, it is not the fault of the federal government. We have given sufficient notice to the state government.”

PRIME Minister Datuk Seri Najib Razak, blaming the Selangor government for delaying the restructuring of the state’s water services sector. He says the Selangor government’s offer of RM5.7 billion to four water concessionaires to buy over water assets is an unreasonable amount.

Najib added that the federal government was not forcing the state to migrate to the new regime. Under the restructuring, the state would buy the water concessionaires’ assets and sell them to the Finance Ministry’s water assets management body, Pengurusan Aset Air Bhd (PAAB). PAAB would then lease the assets back to the state, and the state would become the sole manager of water treatment and distribution in Selangor and Kuala Lumpur. (Source: Hold-up in Selangor water talks not from us, says Najib, The Malaysian Insider, 13 June 2009)

“The current water services model is not sustainable and allowing this to continue will burden the consumers with high tariff. Under the Water Services Industry Act 2006 (Act 655), the concession company is given one year to indicate its intention to migrate to the licensing regime. For those who do not intend to migrate, they will be authorised to operate until the expiry of their concessions, subject to conditions to be determined by SPAN … However, since the privatisation contracts between the Selangor state government and the four concessionaires are still valid, the obligations stated therein must be fulfilled. This will be a burden to both the state government and consumers.”

The National Water Services Commission (SPAN), stressing the urgency of restructuring, on a frequently-asked-questions page in its website about Selangor’s water supply services. The question to the above answer is, “Should the federal government allow the state government to retain the existing water services structure?”

It goes on to say that a delay would hurt consumer interests and adversely impact the supply of water in the Klang Valley, as revenue for water tariffs are currently insufficient to pay for the purchase of treated water. (Source: Restructuring of Selangor Water Supply – The Facts, www.span.gov.my)

“I hope by the end of June, the negotiations will have settled and we can talk about signing the agreement.”

Energy, Green Technology and Water Minister Datuk Peter Chin Fah Kui, on the new deadline to settle Selangor’s restructuring of its water supply services. The deadline was extended from the original end of March date, after the four water concession companies rejected the state government’s price of RM5.7 billion for their assets as being too low. They said the price would not allow them to settle their debts and other liabilities. The Selangor government welcomed the renewed effort to hold talks with the federal government. (Source: June deadline to conclude Selangor water talks, Business Times, 20 May 2009)

“The combined RM5.71 billion offer was made with the objective of delivering the lowest possible water tariffs…

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 …

If, however, the ministry offers the concessionaires a much higher cash value for its assets as well as lucrative 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.”

Pakatan Rakyat Members of Parliament Tony Pua, Charles Santiago, William Leong and Dr Dzulkefly Ahmad, on behalf of the Selangor Water Review Panel, in justifying the state’s RM5.7 billion offer to water companies for their assets. (Source: Federal govt sabotages Selangor, The Nut Graph, 24 Feb 2009) Favicon

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