Silence of Selangor gov't over RM4.22bil lawsuit is concerning

On Monday, the owners of water treatment company Syarikat Pengeluar Air Selangor Sdn Bhd (Splash) had filed a suit in court to claim RM4.22 billion against Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) to collect payments of unclaimed bills.

Previously, Splash had said that since the Selangor government took over full ownership, Syabas had only been paying 36 percent of outstanding bills to Splash for the supply of water but still asked Splash to operate at above design capacity at 110 percent.

Splash had said that being forced to overstress its equipment continuously will lead to further breakdowns and cuts in water supply. On top of this, Splash complained that the lack of payments also limited its ability to maintain its equipment as well as to pay outstanding bills to Tenaga Nasional Berhad.

As this is a legal claim for unpaid bills, the chances for success of Splash to win the RM4.22 billion lawsuit against Syabas will be high. It's either you owe them money or you do not.

Since the Selangor government fully took over, Syabas had also been reporting massive annual losses every year. A check with the Companies Commission of Malaysia also shows that for the latest financial year ending Dec 31, 2016 and tabled on May 30, 2017, Syabas registered a net loss for the year of RM1.19 billion out of a revenue of RM1.87 billion.

Also, the latest auditor-general report for the year 2016 shows that under the second year since Azmin Ali became menteri besar, the Selangor government posted a deficit for the year of RM145 million compared to the consistent surpluses in the previous years under former menteri besar Khalid Ibrahim.

To add to its woes, the Selangor government under Azmin had also signed to borrow as much as RM9.65 billion from the federal government in 2015 to facilitate its takeover of Syabas and two other companies where much of this amount has been drawn down.

As a citizen of Selangor, I note with increasing concern that the Selangor government had kept completely silent that Syabas has been sued for RM4.22 billion for unpaid bills.

We would also want to know why Syabas only paid 36 percent of its bills instead of the full amount as what the ordinary rakyat does.

If the Selangor government loses this RM4.22 billion suit, payment of these outstanding bills will completely wipe out our state reserves of RM3 billion and leave us in a negative position.

Selangor, being a deficit state since Azmin took over as menteri besar, can ill-afford to have its reserves wiped out - especially with another new RM9.65 billion loan that was just signed three years ago.

This leaves us with the worrying and valid question if the Selangor government is well on its way to becoming bankrupt.

TAN GIM TUAN is Petaling Jaya Utara MCA division chairperson. - Mkini