The Selangor state government is not likely to grant the Federal government the third extension to the master agreement signed Sep last year.

The Selangor state government is not likely to grant the Federal government the third extension to the master agreement signed Sep last year. It is understood Selangor CM Azmin Ali is expected to issue a press statement today. Under the master agreement, Air Selangor S/B was supposed to take-over the operations and maintenance of the state's water treatment plants and water supply services, currently managed by the four concessionaires: Splash, PNSB,Syabas and Konsortium Abbas.

• The agreement would have paved the way for the federal government to proceed with the RM3bn Langat 2 water treatment plant project. (Financial Daily) 

This is a negative surprise given that the water deal is at an advanced stage and our expectations that both sides of the government would be even more cooperative in accelerating the water deal this year. If this pans out, it could be negative to Puncak Niaga's RM1.6bn deal and the long-delayed agreement for Gamuda's 40%-owned Splash. We await more statements from the Selangor state government.