Is Selangor being taken for a ride in water deal, ask Pakatan politicians

Selangor has imposed water rationing until April 30. The state government and Putrajaya signed a RM9.65 billion deal in February to restructure the water industry in Selangor but a few lawmakers are asking if the state will really take over operations as outlined in the agreement. – April 1, 2014.Has Putrajaya taken Selangor for a ride over the multi-billion-ringgit water deal that could see privatised concessions being nationalised?

That is the question asked by Pakatan Rakyat (PR) MPs and politicians who are overseeing the agreement between the federal Barisan Nasional (BN) administration and the Selangor government.

Recent statements from Putrajaya indicate that it does not see the terms of the deal the same way as Selangor does. Selangor continues to insist that the terms are still being followed.

At stake is who gets to run the lucrative but leaky Selangor water industry which supplies treated water to seven million consumers in Selangor, Kuala Lumpur and Putrajaya.

“The statements appear to contradict the memorandum of understanding,” said former Kuala Selangor MP Dr Dzulkefly Ahmad, on Putrajaya’s statements that the restructured industry will be run by a federal agency – the National Water Services Commission (SPAN).

Dr Dzulkefly, who was part of a Selangor water panel to restructure the industry, said under the MoU, signed on February 26, a state-owned company, (Kumpulan Darul Ehsan Berhad) would run the restructured industry.

“(The federal government) seems to be oscillating… There is some hesitancy on using Section 114 of WSIA,” said Klang MP Charles Santiago on whether the federal government would use the law to take over the four concessionaires currently managing the industry.

Santiago said Putrajaya was still reluctant to use WSIA because it would send a wrong message to the business community.

“It’s really confusing,” he said of the different statements coming out of Selangor and Putrajaya.

Santiago also said he had not been able to get a clear answer either from the Energy, Green Technology and Water Ministry on whether Selangor or Putrajaya would run the industry once it was restructured.

“The deputy minister (Datuk Mahadzir Khalid) refused to say one way or the other,” said Santiago, who had queried Mahadzir in the Dewan Rakyat on March 25.

Under the February 26 MoU with Selangor, Putrajaya is supposed to “facilitate” the takeover of the water industry.

This would reverse decades of privatisation of the industry and put the management of the industry fully under Selangor’s control through Kumpulan Darul Ehsan Berhad (KDEB).

Selangor government officials have in the past asserted that “facilitate” meant that Putrajaya would invoke Section 114 of the Water Services Act 2006.

The provision allows Putrajaya to take over the industry from the four concessionaires in the interest of the public.

The four companies are Puncak Niaga Holdings Bhd, Syarikat Bekalan Air Selangor Sdn Bhd, Syarikat Pengeluar Air Sungai Selangor Sdn Bhd and Konsortium ABASS Sdn Bhd.

Except for Syabas, all three companies operate plants that process treated water for seven million residents of Selangor, Kuala Lumpur and Putrajaya. Syabas manages the pipe and distribution network.

The Selangor government said that it wanted to manage every aspect of the industry, from managing the dams and rivers that supply raw water to the plants and pipes that process treated water.

However, on March 21, Energy, Green Technology and Water Minister Datuk Seri Maximus Ongkili said the ministry would take over the four water concessionaires but that the industry would be run by a federal government agency – SPAN, together with Pengurusan Asset Air Berhad and representatives from the Selangor government would run the industry for an interim of three years.

Ongkili made no mention of the fact that restructured industry would be handed over to KDEB.

The next day, Menteri Besar Tan Sri Abdul Khalid Ibrahim insisted that KDEB would, in the end, run the industry.

Khalid had said that Putrajaya and Selangor would send KDEB officers to join a team from Putrajaya who would “step in” the operations of the four.

The federal government and KDEB would go in together, but the Putrajaya would stand back and let KDEB manage it, Khalid had said.

Two days later, Santiago pressed Mahadzir on which plan, Ongkili’s or Khalid’s, Putrajaya was following.

“This clearly shows that something is amiss in the whole agreement,” said Santiago, who is also chairman of the Coalition against Water Privatisation.

However, until today, there has been no clarity.