Water firms - Putrajaya's consent the only hurdle left

The federal government's consent remains the only hurdle for Selangor to take over the state’s water concessionaires, said DAP national publicity chief Tony Pua.

He pointed out that Selangor Menteri Besar Khalid Ibrahim had been making proposals to take over the concessionaires Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Syarikat Pengeluaran Air Sungai Selangor Sdn Bhd (Splash), and Korsortium Abass since 2010, but the plans had been rejected by the federal government.

Pua, who is also the Petaling Jaya Utara MP, was responding to Deputy Prime Minister Muhyiddin Yassin-led cabinet committee’s statement on Wednesday, where it said that the federal government would not interfere with Selangor’s water restructuring exercise.

While supporting the statement, Pua also said the panel was already interfering with the concession agreement by saying "the restructuring transaction should be carried out on willing buyer-willing seller basis."

"The concession agreements with the water concessionaires in Selangor contain clauses which specifically allows the state government to 'expropriate' the concessions using a pre-determined and pre-agreed formula," he said.

“If Muhyiddin is sincere in wanting the state government to take over the water industry, then we call upon the cabinet to grant the consent to the expropriation exercise based on the pre-agreed compensation formula will be the fastest and easiest method to resolve the stalemate in Selangor,” he said in a statement today.

According to Pua, the proposal for an independent arbitration panel had been mooted by Khalid since 2010 but rejected by the federal government.

He also complained that the federal government had sidestepped Khlaid’s letter seeking for its consent to terminate the concession agreement due to various breaches by Syabas. 
 
Pua noted that the federal government had persistently acted in “bad faith” has it had also “bailed out” the concessionaires by “taking over” the companies' RM6.5 billion debts.

“The bailout exercise of these water companies at the most crucial moment destroyed any incentive for these water companies to come to a restructuring agreement with the Selangor government,” he said.  

"Hence to demonstrate the federal government’s sincerity and good faith over this matter, it must announce its full support, particularly to accept (Khalid’s) proposed international arbitration panel to decide on a fair price for the acquisition of the water concessionaires," said Pua.