Khalid wants federal govt to invoke WASIA

by **Cals** Thu 20 Mar 2014, 19:01

Business & Markets 2014

Written by Cynthia Blemin of theedgemalaysia.com

Thursday, 20 March 2014 10:26

KUALA LUMPUR: The Selangor government wants the federal government to invoke Section 114 of the Water Services Industry Act 2006 (WASIA) to speed up the state’s water consolidation exercise.
Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim said by invoking WASIA, the state government would be able to acquire the water assets at RM2 billion cheaper, since it would only take into account the value of the water concessionaires’ assets and not equity.
“I will request the federal government to invoke the Act [Section 114 of WASIA],” he said.
However, Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili seems to have a different stance on the matter.
In a statement yesterday, Ongkili said the federal government was currently refining the details concerning the legal aspect of invoking the Act before it is gazetted and implemented in the “near future”.
The minister did not give any firm time frame on when the federal government will invoke WASIA.
Abdul Khalid told the media that he would be meeting Ongkili today to discuss the procedures for the implementation of Section 114.
The menteri besar also pointed out that the state government wanted the Act to be implemented as there would be “no more negotiations” with the three water concessionaires which rejected the state government’s takeover offer.
The three concessionaires are Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash), Puncak Niaga Sdn Bhd and Syarikat Bekalan Air Selangor Sdn Bhd (Syabas). Only Konsortium Abass Sdn Bhd, in which the state has equity interest of more than 90%, has accepted the offer.
The price tag for the takeover of the four water concessionaires was RM9.65 billion previously. But Abdul Khalid is only offering RM7.65 billion now to take over the assets.
He refuted rumours that the Barisan Nasional-led federal government was taking a step back in the implementation of the water restructuring exercise following the signing of a memorandum of understanding (MoU) with the Selangor government.
“I don’t think the federal government will not oblige... the implementation of Langat 2 [water treatment plant] and the water restructuring need to be done at the same time since they are part and parcel of the MoU,” said Abdul Khalid.
Interestingly, certain Pakatan Rakyat component parties have been pushing for the state to stop the Langat 2 project in view of the fact that the federal government has yet to invoke WASIA.
Under the MoU signed on Feb 26, Selangor will take over the operations of the four water concessionaires, which will then be placed under the state-owned Kumpulan Darul Ehsan Bhd.
The MoU also stated that the Selangor government will issue the development order for the construction of the Langat 2 plant and distribution system (LRAL2) within 30 days of signing.
In a statement yesterday, Ongkili described allegations by certain quarters, including Pakatan, that the federal government was not honouring the MoU as “baseless”.
“The steps taken are in accordance with the announcement that Section 114 can be invoked due to national interest,” he said.

This article first appeared in The Edge Financial Daily, on March 20, 2014.