KUALA LUMPUR, June 6 — The federal government should model its water agreement with Selangor after its deal with Penang, DAP publicity secretary Tony Pua said today.
“The minister of energy, water and green technology must heed the prime minister’s call for the Penang water agreement to be the ‘model’ for all Pakatan states.
“He must use the power in his hands, as prescribed by the Water Services Industry Act 2006 as well as the fact that the water bonds will be held by the federal government, to force these private self-interested water companies to concede their control over the water industry to the Selangor state government. Any disputes over valuation and terms can be resolved via an international arbitration panel of water, legal and financial experts,” Pua (picture) said.
The Petaling Jaya Utara MP added that the refusal of the minister to do so will be a figurative slap on Najib’s face because the water industry in Selangor will remain under the fragmented control of four water companies, with the state government having little or no say to ensure that the interest of its citizens is fully protected.
Under the deal signed on June 2, Penang agreed to the migration of its core assets in Perbadanan Bekalan Air Pulau Pinang (PBAPP) to the federal agency, Pengurusan Aset Air Berhad (PAAB), in exchange for a complete restructuring exercise of the outstanding federal loans owed by the state, as well as a special grant allocation of RM1.2 billion for the expansion project of Mengkuang Dam.
It, however, retained the power to have the final say on any water tariff revisions.
Pua said the prime minister’s call is applicable to Selangor whose “fractious and trouble” water industry was resisting consolidation under the state government.
The states which have already signed water restructuring agreements with PAAB are Malacca, Negri Sembilan, Johor and Perlis. PAAB said that talks with Pahang, Terengganu, Kelantan, Kedah and Selangor were at the “advanced” stage.
In Penang, while PBA is listed on Bursa Malaysia, the state government retains a majority 65 per cent stake in the company, ensuring that all decisions relating to the provision of water services are in full control by the state government.
The Selangor government has sought to restructure the water industry to the same effect. The state wants to consolidate the disparate water companies in the state and retain control over water tariffs so that consumers in Selangor and KL will not be burdened by profiteering from these private water companies.
“However, the federal government has failed to give any support to the efforts of the state government, and has instead back Puncak Niaga and Syabas to the hilt to ensure that the latter will continue to retain control over the water industry in Selangor post-restructuring.
“In fact, the BN government has gone to the extent of bailing out these water companies from their debt burden by taking over RM6.5 billion of these debts without binding these companies to any restructuring exercise. The result is there will be no incentive for these companies to agree to any consolidation because the federal government has removed the only bargaining power in its hands,” Pua said.
Putrajaya had said it was eager to take part in Selangor’s proposed discussions over the restructuring of water assets in the state.
Energy, Green Technology and Water Minister Datuk Seri Peter Chin said his ministry will also consider the planned takeover of the debts held by water companies in the state.
Both the state and federal governments have been locked in a struggle over water assets in Selangor since Pakatan Rakyat (PR) took control of the state in 2008, with neither side wanting to give the other control over the critical industry.
Two days after the announcement, Business Times reported that Putrajaya was slated to pay RM6.5 billion to bond holders for the water debts in Selangor.
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