COMMENT My article published in The Star on April 29 sought to provide clarity over what has proved to be a national embarrassment - that it is year 2014 and the richest state in this Federation cannot supply water adequately to its people.

I did so not for some cheap political point scoring, but because of Pakatan Rakyat's continued attempts to blame the federal government when the facts really point to the state government's actions leading us to this unfortunate juncture. And more to the point, in an issue concerning something as basic as water, the people deserve to know how we found ourselves in this mess and how we get out of it.  
 
The article was premised upon two very simple facts. First, the Selangor government's refusal to allow for tariff increase as provided for in the concession agreements, alongside its altogether failed attempts to purchase water assets, has led to the water companies, especially Syabas, failing to spend adequately to maintain the distribution system and reduce leakages or non-revenue water (NRW).
 
Second, the Selangor government's refusal to approve the construction of the Langat 2 water treatment plant since 2009 has also deprived Selangor of clean water supply it would have otherwise received. (If you remember nothing else from this article, remember that).
 
True to form, the Pakatan PR machinery moved into overdrive and within a day, we saw two responses - from Damansara Utama assemblywoman Yeo Bee Yin and a former staffer to the Selangor menteri besar, Nathaniel Tan.
 
Let's take on Yeo's accusations blow by blow and in the process engage with some of Tan's arguments.

Yeo's first accusation: the current water shortage is due to the change in rain pattern as a result of climate change. She believes that the water crisis is not due to demand growth as projected, implying that the federal government shouldn't try to take credit for forecasting this exact problem years ago.
 
I'm not certain what her point is. Obviously, when forecasting supply and demand one tries to take into account all factors and contingencies. Demand has been steadily increasing since 1998 at around 4% per annum and to suddenly blame climate change is a cop out.
 
In any case, considering where we are today, why does it matter whether the forecast was based on expected drought or projected demand or anything else? The fact of the matter is, we forecasted the current water shortage in 2009 and advised them to relook their populist, cheap water policy. We even offered them an exit: Langat 2. What we got in return were statements like that of state exco Elizabeth Wong rubbishing the warnings back in 2011, calling them inaccurate and misleading.
 
There is a related argument that points to other states having water supply issues, such as Johor and Negeri Sembilan - as if to suggest we should cut Selangor some slack. Two quick points: first, any disruption in supply in Johor and Negeri Sembilan have not been anywhere as severe and protracted as Selangor's.

Second, while we can link Johor's water concerns directly to the drought due to the river's proximity to the sea (which means that a drop in water levels can lead to salt water going upstream), in the case of Selangor we saw dam levels drop since May 2013, way before any dry season. The point stands: there were warning signs for Selangor and there was a way out but they just didn't want to take it.

Money needed to plug NRW

Yeo's second accusation: The water tariff in Selangor is already the second highest in the country and Syabas's inability to reduce NRW is because it has been "misusing public money" - implying that tariff increases will be uncalled for. Incidentally, this is an argument in Tan's piece, so let's spend a bit of time here.
 
It is true that the Selangor tariff is the second highest after Johor, even without tariff increases. But what Pakatan doesn't want you to consider is that the piping network in Selangor accounts for 20% of the entire national network, what with it being the most populous and industrialised state with the largest economy.

Never mind the fact that tariff increases are embedded in the concession agreements, as a regulating mechanism, clearly the Selangor tariffs would be higher than the likes of Perak, Perlis or even Penang - which has been getting loans from the federal government (something they also don't want you to consider).
 
What they further fail to mention when they persist with this narrative of Syabas mismanagement is the fact that NRW had fallen from 37.8% in 2005 to 33.1% in 2012, despite the natural deterioration (that is, NRW increases if no efforts are done) of 1.8% per annum.

Curiously enough, Yeo acknowledged that Selangor needs RM540 million to reduce the NRW to the 15% target. Where does she or Tan think the money is supposed to come from if it isn't from the tariff increases? Dropping a few anecdotes about high salaries or office building capex may raise eyebrows - and we know Pakatan is good at smokescreening when the numbers don't add up - but on the fundamental question of NRW reduction, I again ask them to do the maths and tell us where this RM540 million is going to come from?
 
Yeo's third accusation: Langat 2 would only come on stream in 2015 and hence would not solve the current problem.
 
Simple fact: had the state government not drag its feet on awarding the development order for Langat 2 since 2009, it would have been operational now, providing an additional 1,130 million litres per day and essentially avoiding the crisis today - drought or no drought.

Yeo's fourth accusation: despite the federal government taking over the bonds at RM6.2 billion and injecting RM400 million for operations, Syabas has not reduced NRW sufficiently.
 
We've established earlier what it takes for the target NRW reduction, so park that aside for a moment.

The RM6.2 billion was to take over the bonds of the four water operators to avoid an adverse impact on the capital market and the RM400 million was for operational improvements, specifically to pay for the treated water it obtained from the three water operators since the state government rejected their application for a tariff increase - they had absolutely nothing to do with NRW reduction.

Yeo and Tan probably know this, yet it serves their purpose to conflate these issues and claim this as evidence that Pakatan is better at getting value for money than BN.
 
Now, it is true that we cannot keep throwing government money at problems. But there are times the government needs to spend to avoid a total collapse of an industry, such as would have been the case without the RM6.2 billion injection to service bondholders.

‘BN corrupt’ doesn’t cut it anymore

That's why BN stepped in, and we make no apologies for that. Tan claims the term 'bailout' is more appropriate than 'cash injection', which I had initially used. I guess he is half-right - we did bail out the state government who in its politicking was prepared to see precisely the water industry collapse we wanted to avoid.
 
Yeo's fifth accusation, also echoed by Tan: the federal government should not claim credit for agreeing to provide RM9.65 billion to acquire the water companies but release assets to the state government.
 
First off, isn't it telling that just as its first accusation about water shortage forecast, Pakatan is clearly less concerned about how to move forward than it is with making sure it gains maximum political dividends? Isn't it telling that even when the federal government agrees to set aside RM9.65 billion to, again, bail out the state government and help it fulfill its election promises, they still find ways to blame us for it?
 
Bandying around terms like "unbridled greed of BN linked corporate players", "decades of corruption and cronyism", they engineer smokescreens to hide a simple business fact in any modern economy: that a purchase arrangement needs to be on a willing buyer willing seller basis. If they needed any further evidence of that, they needn't look very far as it is found in their repeated and futile attempts to acquire water assets below fair value since taking over in 2008.
 
Whether it is issues like tariffs or something altogether different like Goods and Services Tax (GST), the standard line of "BN corrupt" just doesn't cut it anymore when the facts don't stack up and the numbers don't add up.

In this unfortunate Selangor case, taking some responsibility is the first step to ensuring the crisis ends - because, guess what, Pakatan could still drag its feet on Langat 2 and despite the recent end to water rationing, we might be back here in six months.
 
 
KHAIRY JAMALUDDIN is the minister of youth and sports as well as BN Youth chief. Contrary to popular belief, his house was also affected by water cuts.