MONEY-MAKING SCHEME FOR WHOM? Shares in new water firm be offered to public - Khalid

Shares in Selangor’s new water company will be offered to residents, said its outgoing Menteri Besar today, in response to concerns that the master agreement he signed to restructure the water industry compromised the public’s interest.

Tan Sri Abdul Khalid Ibrahim, who was criticised for signing the agreement with Putrajaya while knowing that he would be replaced, also said that any future rate hikes for water would be affordable.

Selangor’s lucrative but creaky water supply industry would be run by the state government-owned Air Selangor Sdn Bhd instead of private firms as was done in the past, he said.

He said that efforts are still being made to take over Syarikat Pengeluar Air Selangor (Splash), the only company which has refused the initial buy-out.

“Besides that, the restructuring will ensure that there will be no multi-layered profits by water concessionaires,” Khalid said in a statement today.

He said these multi-layered profits were seen in how the companies had demanded rate increases of 82% between 2009 and 2015. These increases were denied by the Selangor Pakatan government.

These were among the terms that were in the master agreement Khalid said, following requests to reveal the contents of the September 12 deal he signed with Putrajaya.

Pakatan Rakyat leaders and corruption watchdogs have been urging Khalid to make the terms of the deal public for fear he made compromises with Putrajaya to Selangor’s disadvatage.

The agreement’s details were also not discussed with the coalition’s leaders, who complained that Khalid’s negotiations with Putrajaya were done in secret.

The master agreement is aimed at taking over operations of the RM30 billion Selangor water industry from four private companies and returning it to public ownership.

The industry will now be run and controlled by state government entity Air Selangor.

The agreement sets out in detail the terms and methods in which the takeover will occur and how much will be paid to the companies.

So far, only three of the four companies which manage treated water services – Puncak Niaga, Syabas and Kumpulan Abass – have agreed to the takeover with the deal costing the state government RM7.8 billion.

In his statement, Khalid said efforts are still being made to buy out Splash.

He also revealed other aspects of the deal which includes the share offer to the public.

“Water shares will be offered to the public once the restructuring exercise is over and Air Selangor turns a comfortable profit,” Khalid said.

Air Selangor will receive an asset injection from the state worth RM14.92 billion. Putrajaya would also give up to RM2 billion to Selangor to help with the takeover process, he added.

All assets from the three companies that had been taken over will be transferred to Perbadanan Aset Air Berhad (PAAB) along with their bonds and liabilities worth RM6.1 billion.

“The facilities and operating licences for Air Selangor will be given out by the National Water Services Commission. The future Langat 2 water treatment plant will also be managed by Air Selangor,” Khalid said.

He also said a priority for Air Selangor, once the restructuring is over, was to reduce the non-revenue water (NRW) rate of 34%. NRW is water lost in the distribution and treatment process due to leakages and theft. –TMI