Selangor has made a fresh offer to the water concessionaires in another effort to resolve the impasse in the state’s water-restructuring exercise.
Worth over RM9bil, according to Mentri Besar Tan Sri Abdul Khalid Ibrahim in a press briefing yesterday, the offer was the third by the state government and the fifth overall, counting one offer worth RM10.3bil by the Federal Government and another worth RM10.8bil by Gamuda Bhd, owner of a 40% stake in Syarikat Pengeluar Air Selangor Sdn Bhd (Splash).
The state’s previous offers were RM5.71bil in early 2009 and RM9.4bil made in mid-2009.
The offer, which was dispatched to the companies yesterday, included taking over all assets and liabilities of the concessionaires.
Analysts had been unenthusiastic when news came early last month that the state government was preparing offer documents to the four concessionaires.
An analyst had said the offer was not likely to be attractive given the strained relationship between the Federal Government and the state.
But Khalid in yesterday’s briefing said the offer was fair and appropriate for the takeover of the companies and in line with the state’s commitment to assume the concessionaires’ assets and responsibilities.
He stressed that a clause in the takeover agreement also stipulated that the issue could be taken to international arbitration if the water concessionaires disagreed with the state government’s offer.
“Since the international arbitrator has no hidden interest in the water operations of the state, they can make a fair decision,” Khalid said.
He added that the offer to the companies was done in accordance with the Water Industry Service Act 2006 and National Water laws.
Khalid said in a press statement issued yesterday that the state was offering to acquire the entire stakes in Puncak Niaga Sdn Bhd for RM64.62 per share, Syarikat Bekalan Air Selangor Sdn Bhd for RM20.78 per share, Konsortium Abass Sdn Bhd for RM9.39 per share and Splash for RM5.95 per share.
He said the takeover would involve the transfer of water assets to Pengurusan Aset Air Bhd (PAAB) as a consolidation of the water assets was needed in order to run the industry effectively.
An analyst with a local investment bank told StarBiz that whatever offer made by the state government would have to be better than the one made by Gamuda.
“The right price should be the exit price as the concessionaires have no assurance that following the surrender of the assets to PAAB, they will still be the operators,” he pointed out.
The added dimension of not knowing their future in Selangor’s water operations likely made the restructuring exercise even more difficult as the concessionaires, according to the analyst, would want to have assurances of whether they would still have a chance to operate, notwithstanding a fair deal.
However, Khalid said the current industry issues showed that this had not been managed well by the private sector and that PAAB was prepared to handle it in a holistic way.
The analyst said the exercise would now be taking a more urgent tone as work on the Pahang-Selangor raw water transfer project was already progressing on the Pahang side.
“They’ve to conclude the restructuring by the end of this year, hopefully by the end of the first quarter or latest end of the first-half,” he added.
He also saw another impending battle looming over the RM8.65bil Langat 2 water treatment plant, which was part of the raw water transfer project.
The Federal Government had last July asked the state government to give consent for the construction of the plant, which Khalid said was not urgent as the state was sufficient in water resources until 2019.
