Resolve water deal by July or face intervention

Govt will invoke Section 114 of the WSIA for the bene t of the people


The federal government has given the Selangor state government until July next year to resolve the impasse over the Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) stake acquisition.

Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili said in the event the related parties fail to reach an agreement over the deal, the government will invoke the Water Services Industry Act (WSIA) 2006.

“We have no choice but to invoke Section 114 of the WSIA for the benefit of the people. We will not entertain another request for an extension by the state or the concessionaire. This restructuring has taken more time that it was supposed to,” he told The Malaysian Reserve.

He said the Selangor-Splash deal alone has delayed the restructuring of the Selangor water industry for the last two years.

He said the government has already drafted plans to invoke the WSIA.

Ongkili said the Selangor government should decide the offer for Splash immediately, as the state has taken ample time to deliberate on the fair value for the assets.

He said the federal government had conducted an independent valuation on Splash’s assets, but said it was for internal consumption.

“We are not prepared to share our valuations with the state government because the negotiation is still on a willing-buyer willing-seller basis.

“It is up to the state to offer and the concessionaire’s option to accept or renegotiate. How can we name the price for a marriage of two other people,” Ongkili said.

Under Section 3 of the WSIA, the federal government shall have the executive authority with respect to all matters relating to water supply systems and water supply services throughout Peninsular Malaysia, Putrajaya and Labuan.

Section 114 grants power to the minister to act based on national interest to instruct the National Water Services Commission to assume control and undertake operations in the property and business of a water concession licensee.

“The determination of what amounts to national interest shall be made by the minister and such determination shall be final and binding upon all persons and shall not be challenged, appealed against, reviewed, quashed or questioned in any court,” Section 114 reads.

It was reported that the Selangor government wanted to offer RM250.6 million to buy out Gamuda Bhd’s stake in Splash. However, the listed company turned down the offer, claiming it would incur a divestment loss of RM920 million.

On Sept 8, 2015, a long-drawn saga over the RM9.65 billion water restructuring deal between Selangor and the federal government was concluded after both parties inked the final four agreements to conclude the exercise.

The state’s Pengurusan Air Selangor Sdn Bhd (Air Selangor) and the federal government’s Pengurusan Aset Air Bhd (PAAB) signed a set of agreements in accordance with provisions stipulated in the master agreement.

The final agreements allowed the completion of the master agreement and the release of up to RM2 billion from PAAB to Air Selangor to pay for the takeover of water concessionaire companies — Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Holdings Bhd, Kumpulan Abass Sdn Bhd and Splash.

In exchange, Air Selangor would transfer up to RM2 billion worth of water assets to PAAB, which will subsequently be leased back to Air Selangor.

Air Selangor took over Syabas and Puncak Niaga from Oct 1, 2015. Out of the four concessionaires, all have agreed to the takeover, except Splash.

Splash was then given a one-year grace period from the time the master agreement came into force to renegotiate terms with the Selangor government.

The negotiations between Air Selangor and Splash had been delayed by a series of extensions since then.