Selangor mulls legal action if Putrajaya refuses to solve water stalemate

SHAH ALAM, May 15 — Selangor has threatened to take Datuk Seri Peter Chin Fah Kui to court if the energy, green technology and water minister refuses to use his ministerial powers to break the deadlock over the statutory transfer of water assets in the state to the federal government.

Tan Sri Khalid Ibrahim’s administration has tussled with water concessionaires in the state and Putrajaya over the valuation of assets such as pipelines, dams and treatment plants since Pakatan Rakyat (PR) first took over Selangor in 2008.

But the Selangor mentri besar told The Malaysian Insider recently he is prepared to take the Barisan Nasional (BN) federal administration to court if it refuses to agree to take the transfer of assets, compulsory under a law passed in 2006, to international arbitration.

“The law gives him the power. We will get a judicial review. The minister needs to do something but he need not act in favour of anybody,” Khalid(picture) said when asked what he would do if Putrajaya refuses to go to international arbitration as suggested by Selangor for over a year.

The Ijok assemblyman said in an exclusive interview he was waiting for a reply from Chin after writing to the minister in late April, adding that “I don’t think they are chickening out but we are forcing the issue.”

Section 114(1) of the Water Services Industry Act (WSIA) allows the minister to assume complete or partial control of concessionaires in the interest of the nation, and “shall not be challenged, appealed against, reviewed, quashed or questioned in any court”.

The law requires the centralising of all water assets except those in Sabah and Sarawak to make water supply management more efficient but Umno-linked water concessionaires Puncak Niaga and Syabas have repeatedly rejected offers from the state.

Both are controlled by Tan Sri Rozali Ismail, who is Selangor Umno treasurer and the 31st richest man in Malaysia, according to Forbes.

The state government has made three previous offers for the water assets. The first offer, RM5.7 billion for assets and equity, was turned down by all four concessionaires in the state, while the second RM9.4 billion offer — this time including liabilities — was rejected by Syabas and Puncak Niaga.

A third offer worth RM9 billion for a 100 per cent takeover of all four companies in January last year was also rejected.

Putrajaya has also dismissed Selangor’s valuation of RM11 billion for all the assets including the 80 per cent the state government says it already owns, saying the federal government’s Water Asset Management Company (PAAB) will only pay RM1.1 billion.

Selangor has asked Putrajaya for over a year now to allow the matter to be brought to international arbitration as the various parties cannot agree on the valuation of the assets.

“WSIA says implement and now there are some worries about not being fair, then international arbitration is the answer,” the Bandar Tun Razak MP said in the interview.

The PKR-led state government has said that resolving water asset impasse is crucial to continue its free water scheme and head off tariff hikes.

It currently writes off the first 20 cubic metres used by some four million consumers in Selangor, Kuala Lumpur and Putrajaya.

But PR has accused the federal government of stalling the process at the expense of the Selangor public by bailing out water concessionaires with a RM6.5 billion takeover of outstanding debts owed by the companies in 2010.

“Again the federal government is bailing out private companies, so why not just make a deal with the state?” Khalid asked.

The mentri besar said he wants to solve the issue before his mandate expires in a year.

He also told The Malaysian Insider he would not hold elections until the second half of the year, which would deny Datuk Seri Najib Razak the chance to win back the country’s richest state and help cement his hold on power.

Observers say the prime minister needs to improve on Election 2008, during which BN lost a record 82 federal seats and five state governments and only a return to its customary two-thirds majority of Parliament would guarantee his survival.