The Selangor government will cooperate fully with the federal government in its bid to employ the Water Services Industry Act (WSIA) 2006 to take over the water services in Selangor, Kuala Lumpur and Putrajaya, after the state's offer to takeover the four concessionaires failed.

“The (Energy, Green Technology and Water) Ministry, through a letter dated Sept 9, 2013, said it will take over water services using Section 114 of the WSIA if the issue is not resolved by Dec 31, 2013.

“As such, I have discussed with the minister, Maximus Ongkili (on Tuesday) and agreed to give the federal government full cooperation in its use of Section 114,” Selangor Menteri Besar Abdul Khalid Ibrahim said yesterday.

With this, the Selangor government has also agreed to the controversial federal project to build the Langat 2 water treatment plant.

This agreement between the state and federal governments follows Selangor's failure to secure its takeover of the four water services concessionaires with its RM9.65 billion offer last year.

The four companies are Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Konsortium Abass Sdn Bhd (Abass), Puncak Niaga Sdn Bhd and Syarikat Pengeluar Air Selangor Holdings Bhd (Splash).

However, together with its agreement, the state government is also seeking the appointment of two of its officers to administer the water concessionaires to ensure smooth water services in Selangor, Kuala Lumpur and Putrajaya.

The two names mooted by the state are Khalid's former political secretary and now Menteri Besar Incorporated (MBI) chief executive officer Faekah Husin (above) and Kumpulan Darul Ehsan Bhd (KDEB) president Suhaimi Kamarulzaman.

MBI and KDEB are both state investment arms.

“The state basically agrees to the construction of the Langat 2 water treatment plant and both these administrators will be tasked to ensure it is realised.

“I have detailed these matters out in a letter to the (energy, green technology and water) minister, which I sent this morning,” Khalid told reporters after chairing an eight-hour state executive council meeting yesterday.

Meanwhile, at a separate press conference this morning, Ongkili told reporters that he has already received the state government’s letter on the matter and is considering it.

“Next week, the Special Cabinet Committee on Selangor Water will meet, and after that the cabinet will finalise steps, mechanisms, legal issues, and management structure that will be taken by the federal government to ensure that the water supply in Selangor is not only secure, but rebuilt,” he said.

Unrealistic expectations

Khalid also said the takeover offer failed as shareholders in the concessions had “unrealistic” expectations and sought higher compensation.

Selangor had previously opposed the RM8.65 billion Langat 2 plant, which it argued is a cost-inefficient way to provide treated water to the state.

The federal government argued that Selangor would face a water crisis without the plant, which includes a 44.6km tunnel to channel water from Pahang to Selangor.

Abass, which is owned by a Selangor government-linked company, and Splash have been positive about the RM9.65 billion package but not Puncak Niaga and Syabas.

Abass, Splash and Puncak Niaga own water treatment plants while Syabas largely distributes the treated water.

Syabas has been blamed by the Selangor government for poor services, resulting in frequent water cuts, but the company argues this is because the state is withholding funds it needs to upgrade its assets.

Syabas is owned by Puncak Niaga, whose majority shareholder is its Umno-linked executive chairperson Rozali Ismail.


Additional reporting by Koh Jun Lin.