January 2009: Pakatan Rakyat’s attempt to restructure the water industry and avoid increasing water tariffs
“There should be one operator that manages the water operation, so we have to take back the concession from the operators before April .”
Selangor Menteri Besar Tan Sri Khalid Ibrahim explaining that the privatisation of the state’s water assets to four different concessionaires had created an inefficient and fragmented industry. Under the existing agreements, water operators are allowed to raise rates periodically. He said if the government took over the concessions and restructured the tariff formula, it could avoid increasing water prices. (Source: Selangor aims to take over water assets in March, The Star, 24 Jan 2009)
February 2009: Federal government intercepts Selangor government’s negotiations with water concessionaires
“…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.”
Pakatan Rakyat Members of Parliament Tony Pua, Charles Santiago, William Leong and Dr Dzulkefly Ahmad, in a 24 Feb 2009 press statement.
Selangor had been in negotiations with the four water concessionaires in the state to acquire their assets for RM5.71 billion. Federal government agency SPAN however then announced it would negotiate directly with the four concessionaires. This led to a breakdown in negotiations between Selangor and the four companies, which remains unresolved till today. (Source: Federal govt sabotages Selangor, The Nut Graph, 24 Feb 2009)
July 2010: DPM says Selangor’s water concessionaires facing financial problems and water crisis looms
“[The Selangor government] thought they were doing something popular with their election promise. They gave free water and promised that water prices would not go up. They are absorbing RM13mil a month and are facing big deficits.
“However, they say they cannot afford to pay (the concessionaires) if the cost keeps going up. If they don’t pay, the water processing companies will suffer losses as they too are facing problems as the cost of managing and processing water is very high.”
Deputy Prime Minister Tan Sri Muhyiddin Yassin saying the Selangor government’s move to provide free water and not increase tariffs was taking a toll because the state had to absorb the cost. He said Selangor and Kuala Lumpur would suffer a water crisis in two years unless the state government solved the water problem.
Muhyiddin also said the federal government was facing stumbling blocks with the RM9 billion Pahang-Selangor raw water transfer project because of the Pakatan Rakyat-led Selangor government. (Source: DPM: Selangor heading for water crisis, The Star, 12 July 2010)
July 2010: Buyout and restructuring of Selangor water concessionaires still unresolved
“Despite the fact that Syabas had breached various terms of the concession agreement, if not for the fact that Pakatan Rakyat won in the last general election, the company would have enjoyed substantial increases in tariff rates, reaping lucrative profits as a result. We’d like to ask Muhyiddin, why is the federal government using taxpayers’ monies to bail out and subsidise a private company?”
“We call upon the BN government to allow and support the Selangor government’s initiative to consolidate the industry under the state, which will not only save Syabas from its agony, eliminate the need for the federal government to give interest-free loans, but most importantly, allow the people of Selangor and Kuala Lumpur to enjoy improved water services at lower prices.”
Petaling Jaya Utara Member of Parliament Pua calling on the federal government to stop hindering the Selangor government’s effort to buy over the water concessionaires and take over water management.
Pua, who is also DAP national publicity secretary, disputed Muhyiddin’s claim that Selangor was heading towards bankruptcy over its water tariffs. Pua said the “free water” in Selangor was funded almost entirely from profits from its minority interests in the water companies.
He said the BN had signed an unfair privatisation agreement with Syabas, allowing it to raise rates by 37% in 2008, 25% in 2011, 15% in 2014, and 10% every subsequent three years thereafter. (Source: DAP: Muhyiddin shielding Syabas over Selangor rates, The Malaysian Insider, 12 July 2010)
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