Water asset management company, Pengurusan Aset Air Bhd (PAAB), is likely to complete its acquisition of part of the water assets in Perak in the first quarter this year.
Industry sources said that PAAB was likely to sign an agreement with Perak over the next two months, as it was already in advanced talks with the state government.
The cost of acquiring the water assets in Perak is estimated to be over RM650mil.
PAAB has been entrusted with the restructuring and consolidation of the country’s fragmented water sector by taking over the assets and making state concessionaires asset-light, thus allowing them to focus on treatment and distribution.
In December, Perak Mentri Besar Datuk Seri Dr Zambry Abdul Kadir was quoted as saying that the state’s RM970.59mil water supply debt to the Federal Government would be reduced to RM78.66mil with the settlement of the water asset migration between Perak Water Board and PAAB.
Unlike other states, which have agreed to allow the complete migration of their water assets to PAAB, Perak was reported to have requested to retain RM200mil worth of water assets within the state.
Currently, five of 12 states in the peninsula Johor, Malacca, Negri Sembilan, Penang and Perlis have restructured their water services industry.
With the acquisition of the five state assets, PAAB has nearly RM7.7bil worth of water assets in its books.
Last June, the Penang government transferred RM655.2mil worth of water-related assets to PAAB in exchange for a complete restructuring of the outstanding loans owed by the state.
PAAB will lease back the water assets to Perbadanan Bekalan Air Pulau Pinang for 45 years. The latter will pay an annual lease rental of RM14.56mil and upon settlement of the lease at the end of 45 years, the state land will automatically revert to the state.
Although PAAB is securing the water assets of the sixth states soon, negotiations with the concessionaires, which started more than three years ago, are far from concluded.
The water assets acquisition in Selangor remains unresolved. The Selangor water assets are estimated to be worth RM10bil to RM12bil.
The problems relating to the consolidation of water resources in Selangor have been dragging on for years, given the state’s reluctance and disagreement over valuations.
The Federal Government has warned that Selangor, Kuala Lumpur and Putrajaya would face an impending water shortage in 2014. The Selangor government, on the other hand, assures that there is enough water to last till 2019.
Should the water shortage problem occur, Negri Sembilan has agreed to sell treated water to Selangor to ease the pressure on its neighbour, which is expected to face an acute shortfall by 2014.
Negri Sembilan Mentri Besar Datuk Seri Mohamad Hasan said the National Water Services Commission had requested that the state supply between 45 million and 70 million litres of water per day to Selangor.
