State govt needs to put a price on the water concessionaire to seal the deal by Oct 5
By ALIFAH ZAINUDDIN & RAHIMI YUNUS
The government holds firm to the view that the Selangor state government should submit a price offer to Syarikat Pengeluar Air Selangor Holdings Bhd (Splash) to expedite the takeover deal’s progress.
As the Oct 5 deadline for the long-standing water deal closes in, Putrajaya is waiting for the state administration to put a price on the water concessionaire to seal the deal.
“They have done their own valuation so they know the value. Just make the offer because there is still a lot to be done as Splash is a listed company,” Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili told reporters after officiating the International Water Association-Asia Pacific Region Conference 2017 in Kuala Lumpur yesterday.
Ongkili said the federal government can only allocate funds to support Selangor’s acquisition of Splash after a sale and purchase agreement has been signed.
“The purchase consideration must be arrived at a ‘willing-buyer, willing-seller’ basis.
“Once that has been agreed, we can discuss with the state government on how much the federal government will give to fund the acquisition,” he said.
Selangor Mentri Besar Datuk Seri Mohamed Azmin Ali recently said it was not up to the state to decide on the consideration value for Splash, as the purchase will be paid by the federal government’s Pengurusan Aset Air Bhd — as established under the master agreement.
He said the ministry had asked his administration to pay up to 40% of the total consideration without disclosing the valuation made by third- party Deloitte Malaysia.
“How can you ask us to pay 40% of the total consideration when we do not know what the total quantum is?” Mohamed Azmin quizzed in his recent interview with The Malaysian Reserve.
Association of Water and Energy Research Malaysia president S Piarapakaran said the Selangor state government does not need Deloitte’s valuation to make a constructive move.
Since its initial RM250.6 million offer to buy out Gamuda Bhd’s stake in Splash had been rejected, the state administration could ask the ministry to activate Section 114 under the Water Services Act 2006.
This would allow the federal government to take over Splash and facilitate the restructuring exercise.
“Under national interest, the ministry can take over, but has no power to dispose. The Selangor state government is in the driver’s seat and can push ahead with the deal, one way or another,” Piarapakaran said.
Piarapakaran said the state government has the right to decide on a fair price. “Whether Splash wants to take it or not, or (if) they want to take it to court, that’s their problem,” he added.
However, the ministry has indicated that it would be “premature” to activate Section 114 as Selangor has not offered a price for the takeover.
Piarapakaran said the state government can apply for a judicial review in court against the federal government, if the ministry and the National Water Services Commission failed to arbitrate the deal.
The Splash deal is the final piece of the “jigsaw” in Selangor’s much needed water consolidation plan.
The state government was supposed to take over Splash after it absorbed three private water concessionaires, with the federal government brokering the deal because it involved both state and federal assets.
The state government initiated the takeover of the four concessionaires in 2008. Over the years, all the disparate companies have agreed to the buyout except Splash.