MP SPEAKS The federal government has failed in its promise to ensure that privatised water concessionaires in Selangor accept the acquisition offers made by the state government.

They had been given up to yesterday to respond to the renewed acquisition offers made by the state government for the purposes of consolidating the water industry.  

The renewed offers were made as a consequence of the Memorandum of Understanding (MOU) signed between the federal and Selangor governments on Feb 25.

Yesterday, three of the concessionaires - Puncak Niaga Sdn Bhd, Syarikat Bekalan Air Selangor (Syabas) and Syarikat Pengeluar Air Selangor Holdings (Splash) - announced to Bursa Malaysia that they have effectively rejected the renewed offers.

While Splash rejected the offer outright, Puncak Niaga and its subsidiary Syabas, said they were willing to “consider” the offer subject to several conditions which are unreasonable.  

Their stipulations include:

(i) a higher return on equity of 15 percent instead of 12 percent;

(ii) full payment of the disputed compensation for the non-increase in water tariff hike by the state government;

(iii) rejection of due diligence by the state government on Puncak Niaga and Syabas assets; and

(iv) rejection of international arbitration in the event of disagreements over the appropriate return of equity.

Hence, the state of the water industry restructuring has returned to Square One.

Only one company has accepted the offer - the state government's  subsidiary, Kumpulan Abass.

The state government had shown goodwill and willingness to cooperate with Putrajaya to resolve the critical water crisis by signing the MOU, witnessed by Prime Minister Najib Abdul Razak himself.  

Selangor even agreed to immediately approve the development order for construction of the Langat 2 water treatment plant project. All other required approvals such as land rights, access permissions and other permits are to be granted within 30 days of the MOU being signed.

However, the federal dovernment has failed to cajole the three concessionaires into accepting the offer.

Since the BN government has failed to live up to its end of the bargain, the Selangor government no longer needs to grant all the additional approvals required by Langat 2.

To ensure that the MOU remains intact, it is now up to the federal government to announce its commitment by announcing that it will immediately exercise all its powers under the Water Services Industry Act, particularly using Clause 114, to compulsorily acquire these water companies, based on the compensation model detailed in the concession agreements.

In the meantime, the Selangor government via its Executive Council and the state assembly, should exercise all its powers enshrined under the laws of the state and the federal constitution to deny any further licences to the relevant federal government entities for the Langat 2 project. Without these additional approvals, the Langat 2 project cannot proceed.

The Pakatan Rakyat administration and government will not be cheated by the federal government. We will not betray their trust of voters and will fight tooth and nail with Putrajaya to ensure that the interests of the Selangor residents are fully protected.

 
TONY PUA is the DAP’s member of parliament for Petaling Jaya Utara.