Water deal between Malaysia's Selangor, Putrajaya concluded

KUALA SELANGOR (THE STAR/ASIA NEWS NETWORK) - The long-drawn saga over the water restructuring deal between the Selangor and Federal governments has concluded after the final four agreements were signed between the two parties on Tuesday evening (Sept 8).

The state's Pengurusan Aset Air Selangor (Air Selangor) and the Federal Government's Pengurusan Aset Air Berhad (PAAB) signed a set of agreements in accordance with provisions stipulated in the Master Agreement.

The four agreements, namely the Facilities Agreement, Lease Agreement, Settlement Agreement and Rights of Use Agreement were signed by Air Selangor chief executive officer Suhaimi Kamaral Zaman and PAAB chief executive officer Datuk Ahmad Faizal Abdul Rahman.

After the conclusion of the signing ceremony, Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili told a press conference that the signing was a major milestone in the restructuring of the Selangor, Kuala Lumpur and Putrajaya water industry.

"With the conclusion of the agreements, the Master Agreement can be enforced and subsequently the sale and purchase agreement for the Puncak Niaga Holdings Berhad (PNHB) assets will also be enforced to allow Air Selangor to takeover Puncak Niaga (M) Sdn Bhd (PNSB) and Syarikat Bekalan Air Selangor Sdn Bhd (Syabas),'' said Dr Ongkili.

He added Air Selangor had two weeks to take over PNSB and Syabas followed by the take over of Konsortium Abass Sdn Bhd within the next four months.

"The signatories have five months beginning today (Tuesday) to complete all conditions precedent (CP) including transfer (meminda) of the Syabas concession agreement as well as conclude concession agreements related to PNSB and Abass,'' said Dr Ongkili.

He added this was to enable Air Selangor to hold the Facility License in Selangor and the Service License in Selangor, Kuala Lumpur and Putrajaya.

Selangor Mentri Besar Azmin Ali said the signing of the agreements allows the completion of the Master Agreement and the release of up to RM2 billion (S$659 million) from PAAB to Air Selangor to pay for the takeover of water concessionaire companies - Syabas, PNSB, Abass and Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash).

"In exchange, Air Selangor will be transferring up to RM2 billion worth of water assets to PAAB, which will subsequently be leased back to Air Selangor,'' he said.

He added Air Selangor would be given the Facilities License as well as a Service License next year.

"The licenses will enable Air Selangor to provide holistic water supply services in Selangor, Kuala Lumpur and Putrajaya,'' he said adding that Air Selangor is expected to take over Syabas abd PNSB from Oct 1 onwards.

Out of the four concessionaires, all have agreed to the takeover expect Splash, which is disputing the amount offered.

Splash has also been given one-year grace period from the time the Master Agreement came into force to renegotiate terms with the Selangor government.

Out of the RM2 billionto pay the concessionaire companies - RM1.68 billion will go to PNSB, Syabas and Abbas whilst the remaining RM32 billion was offered to Splash.

Dr Ongkili said the Selangor state government would continue negotiations with Splash, and the Federal Government would only step in when it is required.

When asked about the dead end with Splash, Azmin said the state to settle everything within the stipulated time.

"We are given one year to conclude the whole exercise from 10th July (the date the Supplementary Agreement was signed) and the state has started initial discussions with Splash so hopefully we should be able to conclude the whole discussion before July next year,'' said Azmin.

He declined to reveal the amount that was being discussed with Splash.

Earlier in Kuala Selangor, Azmin said there would not be any more delays in the water restructuring exercise as everything had been concluded by both Federal and Selangor governments.

"I strongly believe that once the whole industry has been taken over by the state, we would be able manage the industry well and more effectively in the interest of the rakyat,'' said Azmin adding there would not be any water shortage or disruptions after that.

He said Air Selangor's main concern and concentration would be on way to arrest the problem of non-revenue water (NRW).

"We are going to address the issue of NRW which is still very high in Selangor at 35 per cent compared to many other states,'' said Azmin.