Selangor’s water restructuring exercise continues to be uncertain with a solution yet to be found.
AmResearch in a note yesterday said the latest development, whereby Selangor Menteri Besar Tan Sri Khalid Ibrahim handed a memorandum on the water issue to the Yang di-Pertuan Agong Tuanku Mizan Zainal Abidin last Sunday, showed that political factors were the main cause for the deadlock.
The latest development validates an earlier view that the deadlock surrounding negotiations on Selangor’s fragmented water industry was due to the evolving federal-state relationship, it said.
Among the salient points of the memorandum was a request for the King to order the rights to Selangor’s water resources, now under Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), be returned to the state government.
It also called for the King to review the objectives of the Water Services Industry Act.
Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui has been reported as saying that the ministry would give the state government until the end of this month to resolve the issue.
However, an official from the Selangor Mentri Besar’s office said the state government had just received a letter from the ministry allowing the Selangor government to make direct offers to water companies to buy back their concessions.
It is now back to square one again. Earlier, we did deal directly with the water companies but the ministry wanted to get involved in the deal too. Now, they allow us to deal directly with them (water players), the official said yesterday.
Khalid, through a Twitter message yesterday, claimed that the state government had received the letter from the ministry.
But an official from the ministry, when contacted by StarBiz, did not confirm if the ministry had issued the letter, saying the matter was being checked.
The state government had previously made two offers to the concessionaires: one for RM5.7bil that was rejected by all players and another RM9.4bil offer that was rejected by Syabas.
The Federal Government also made a RM10.3bil offer which was rejected by Syabas.
According to news reports, there are four water players in Selangor - Syabas which has the mandate to supply treated water to Kuala Lumpur, Selangor and Putrajaya, and water treatment companies Syarikat Pengeluar Air Sungai Selangor Holdings Bhd, Puncak Niaga (M) Sdn Bhd and Konsortium Abass Sdn Bhd.
The reports said that many of the contentious issues involving Syabas came about after a proposed tariff hike of 37%, which was slated to take effect in January 2009 as per the concession agreement, but which did not materialise.
The Selangor government under Pakatan Rakyat (PR), which came into power after the March 8, 2008 general elections, has opposed the tariff hike.
Instead, the PR state government had opted to give the first 20 cu m of water per household for free.
The compensation for Syabas as per the concession agreement has yet to be paid, which works out to about RM36mil a month.
