Syabas’ financial taps run dry

According to blogger Raja Petra, Syabas is bankrupt and BN is trying to rescue its crony from drowning.

KUALA LUMPUR: Blogger Raja Petra Kamarudin has claimed that the parent company of Selangor water concessionaire Syabas is bankrupt, citing it as a reason behind Putrajaya’s effort to stall Selangor’s effort to consolidate its water industry.

The Malaysia Today webmaster said the government’s persistence to stop the Pakatan Rakyat administration from terminating its contract with Syabas from Puncak Niaga Sdn Bhd’s (PNSB) was to save its chairman and alleged crony Rozali Ismail.

The self-exiled Selangor prince charged that the legal demand for Selangor to compensate Syabas for disallowing it to raise water tariff was to offset the losses incurred by PNSB.

“Through the consolidation of the water industry, Rozali will stand to lose a colossal amount of money as he has over-extended himself and will only agree to a pricing that recognises his ‘future loss of business and profits’.

“A closer look at the financials of PNSB will tell the story as to why Rozali needs to cover ‘future profits’. His companies are more or less bankrupt so he wants to make money the quick way at the expense of Selangor and the Malaysian taxpayers,” he said.

A look at PNSB’s financial statement indicated its current liabilities for 2011 was at RM2.38 billion while its current assets for the same year was RM1.7 billion meaning its debt is close to RM700 million.

Tariff hike

At the back of this, PNSB’s 2010 financial statement showed the executive directors’ remunerations amounted to RM15,580,870 while “one of them earned between RM6,800,000 to RM6,900,000″ annually.

The financial report also showed PNSB and Syabas’ non-performing water assets stood at 10% higher than the acceptable 20%.

The concessionaire is also entangled in a RM2 billion legal battle after it only managed to pay about 40% of what it owes to water treatment companies while refusing to approve new water supply development projects in Selangor and here.

Raja Petra said Putrajaya must explain three key issues in the debacle – why stop Selangor from terminating its agreement with PNSB and Syabas when they are clearly incapable and bankrupt, the KL Bourse’s failure to declare them as bankrupt and its silence on Syabas’ refusal to approve new water supply projects.

Prime Minister Najib Tun Razak had promised to solve the water issue in the state but told voters it needed to put Barisan Nasional back in Selangor but the state blamed Putrajaya for intentionally prolonging a crisis which would benefit the ruling coalition in the long run.

Raja Petra said BN would likely increase the tariff if it regained Selangor. Najib has made it a personal quest to wrest the country’s most modern state in the upcoming polls which is likely to be held this year.