Poser on offer price for Selangor water concessionaires

by **Cals** Fri 14 Mar 2014, 09:02

[size=33]Poser on offer price for Selangor water concessionaires[/size]

Posted on 14 March 2014 - 05:36am

Rupinder Singh
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[size=14]PETALING JAYA: The invocation of Section 114 of the Water Services and Industry Act (WSIA) 2006 has complicated rather than cleared up the issue of pricing in the final offer for the four water concessionaires in Selangor.

On Wednesday, Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim said post-invocation of the WSIA, the state government will pay RM2 billion less for the entire water assets.

He said that since the Federal Government has invoked WSIA "total payment to concessionaires is expected to be reduced by as much as RM2 billion compared to the previous offer of RM9.65 billion."

Khalid's fellow opposition party members however opined that about RM3.35 billion should be cut from initial offer of RM9.65 billion.

"Based on our estimates, the value of compensation could be as low as RM6.3 billion but not exceeding RM7.6 billion highlighted by Khalid yesterday," PKR strategic director Rafizi Ramli, DAP national publicity secretary Tony Pua, and PAS Research Centre executive director Dr Dzulkefly Ahmad said in a joint statement released yesterday.

They insisted that the BN federal government must not at any point compensate the concessionaires for "loss of future profits" which is not provided for in the privatisation agreements.

Analysts are puzzled that the final price is still up for debate considering that only Gamuda has rejected it outright.

"I'm not sure if with WSIA enforced the federal government can alter the offer price since it is a hostile takeover," said one analyst.

This is the first time a federal government will invoke the Clauses 114 and 191 of WSIA to compulsorily acquire these privatised water companies.

The Ministry of Energy, Green Technology and Water (KeTTHA) did not respond to queries sent by SunBiz as at press time yesterday.

RHB Research in note to investors yesterday said Puncak Niaga has yet to hear from the state government at this juncture.

"We believe Puncak will likely seek arbitration should the final offer deviate significantly from the last offer of RM1.5 biIlion for its 100% stake in Puncak Niaga Sdn Bhd and 70% stake in Syabas," it said.
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