Selangor urged to name price for Splash takeover

State govt has until July before the federal govt moves to invoke Section 114 of WSIA

By P PREM KUMAR, DASHVEENJIT KAUR & RAHIMI YUNUS / Pic By ISMAIL CHE RUS

The federal government remains in the view that the Selangor state government must state an offer price to buy Syarikat Pengeluar Air Selangor Holdings Bhd (Splash), as stipulated in the master agreement to end the state’s water saga.

Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili (picture) said the reluctance of the Selangor government to name its price for Splash has resulted in the water crisis in the state recently.

Ongkili said the state government should not delay the process, as to date, eight states have completed restructuring their water industry using similar methods to Selangor.

He pointed that none of these cases were more complicated.

Ongkili was responding to Bandar Tun Razak MP Tan Sri Abdul Khalid Ibrahim who asked the federal government to invoke clauses in the Water Services Industry Act 2006 (WSIA) to forcefully take over the Selangor water concessionaires.

Abdul Khalid was also Selangor’s former mentri besar (MB) who brokered the long-delayed water industry restructuring by cooperating with the federal government.

“There are six states confirmed and two more to sign in the next two or three months. Thus, the principle used has been tried and proven under the WSIA.

“Prior to this, the Selangor MB had also used the same way for the purchase of the first three companies in open negotiations with prices certified by the state government at that time,” Ongkili said.

The minister maintained that the government intends for negotiation to continue on a “willing buyer-willing seller” basis, however, the process cannot be delayed further.

“We have given the state ample time. If they want to buy something, they have to name the price and can’t expect the federal government to name the price.

“We are only left with two more options after the current extension expires on July 4, 2018. Either invoke Section 114 of the WSIA for a forced takeover or just cancel the entire master agreement,” he said.

While admitting that cancelling the entire agreement would be a waste of energy, time and resources since 2015, Ongki li said the federal government will be left with “very few options” for the benefit of the people.

“We will have to do something, keeping in mind of the people’s and country’s interest. Section 114 of the WSIA allows us to force take over under national interest,” he added.

Meanwhile, the ministry’s secretary general Datuk Seri Dr Zaini Ujang said the state government has until July before the federal government moves to invoke Section 114 of WSIA.

“It’s stuck at Selangor. They have to offer the price as the next step. We just give them loans and you cannot ask the ‘bank’ to state the price,” Zaini told The Malaysian Reserve on the sidelines of the Europa Awards for Sustainability 2018 soft launch in Kuala Lumpur yesterday.

The federal government through Pengurusan Aset Air Bhd had agreed to channel RM2 billion for the Selangor water restructuring exercise, to allow the state take over all concession companies — Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Holdings Bhd Konsortium Abbas Sdn Bhd and Splash — and put under one centralised administration with a combined deal of RM6.59 billion.

Splash is the last piece of the puzzle that needs to be sorted out after it turned down the state offer of RM250.6 million, citing that the offer price was too low.

On Sept 8, 2015, a longdrawn 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 Sdn 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.

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 oneyear grace period from the time the master agreement came into force to re-negotiate terms with the Selangor government.

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