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Thread: Selangor’s troubled waters

  1. #11
    Join Date
    Oct 2008

    Water concessionaires reject S’gor govt’s offer

    Water concessionaires reject S’gor govt’s offer

    With the federal National Water Services Commission (Span) intervening and with the Malaysian Anti-Corruption Commission targeting Selangor MB Khalid Ibrahim, is it any surprise then that the private water concessionaires have rejected the Selangor government’s offer for the takeover of water assets?

    The interventions of these two federal-level commissions came just before the expiry of the Selangor government’s 20 Feb deadline for the offer to be accepted by the water concessionaires.

    Abbas and Splash have now turned down the offer. Puncak Niaga too. From the point of view of these concessionaires, why accept the Selangor government’s offer when you know that its position has been weakened by the actions of federal bodies - and when you know there is an alternative?

    Instead of backing the Selangor government’s offer (valuing the assets based on book value), Span has just thrown a lifeline to the water concessionaires who are seeking a much higher valuation (based on discounted cash flow or future profits).

    Guess who ends up ultimately footing the bill in the form of higher water tariffs (perhaps 30 per cent or more from April)?

  2. #12
    Join Date
    Oct 2008

    Federal Govt trying to sabotage Selangor Govt & bailout Water Concessionaires

    From Tricia Yeoh, Selangor MB's Research Assistant:

    Dear all,

    Thanks to those of you who have been concerned about the ongoings of Selangor of late. Indeed it's been a busy period for us especially over the last two weeks. Two issues I'd like to raise in this mail out to you:

    1) Malaysian Insider article here saying that irregularities in the State GLCs' accounts from the past State government are being revealed (click to see the article here). Look out for updates.

    2) Selangor is going through a water restructuring exercise and for those of you following the stories on the media, it's turning out to be a pseudo-fight between the State and Federal Governments. It can get technical, but the bottomline is this: The Federal Government bypassed the Selangor Government to negotiate with water concessionaires, and is going to likely save the failed privatised concession companies by paying them a high price. If so, Selangor and KL citizens are going to suffer by getting their water tariffs increased by 37% on April 1st 2009 OR other Malaysians suffer by getting taxed in other forms. See the Water Panel's latest press release pasted below.

    It is an admission that privatisation has failed. Citizens have paid the price for this failure once already, and paying companies a price beyond what they deserve is a second time people will pay.

    I hope people will see that this goes beyond merely the "financial section" of the news. It will affect consumers ultimately. I'll be sending round more info soon. We are organising briefing sessions throughout the next weeks on this. Please be on the lookout for and spread the news on how seriously this exercise will impact all of us.

    If you are in a capacity to publicise this through the news, magazines, tv shows, editorials, blogs, write-ups, forums, etc, please do so and contact me if you need more info at 012-6122100. I can provide people to speak on the issue.

    Thanks and best,

    Tricia Yeoh


    Joint Media Statement by Member of Parliaments in the Selangor Water Review Panel in Kuala Lumpur on Monday, 23rd February 2009:

    Federal Government Sabotaged Offer by Selangor Government to Acquire Water Assets and Concession in the State

    The Selangor state government made an offer to 4 privatised water service providers – Puncak Niaga Sdn Bhd (PNSB), SYABAS, SPLASH and ABASS to acquire their water assets and concessions on the 13th February 2009.

    The combined RM5.71 billion offered was made with the objective to deliver the lowest possible water tarriffs for the residents of Selangor and Kuala Lumpur. At the same time, the offer was consistent with, and guided by the terms and conditions specified in the concession agreements signed willingly by all parties involved. It was a comprehensive offer because it encompasses the audited asset value of all water-related assets as well as a very fair and reasonable return to the capital invested by the respective concessionaires.

    However, before the concessionaires are able to respond to the state government's offer by the 20th February, we are shocked that the Ministry of Energy, Water and Communications, via Dato Teo Yen Hua, CEO of National Water Services Commission (SPAN) announced on the 18th February that the Federal Government will proceed to negotiate directly with the water concessionaires.

    Instead of supporting the state's offer, SPAN intentionally threw a spanner in the works to sabotage the Selangor state's attempt at delivering the lowest possible water tarriffs to her people.

    For with an alternative competing offer which will not only encompass higher cash valuation but also more lucrative terms and conditions from the Federal Government, SPAN has single-handedly destroyed any likelihood of a positive response from the concessionaires to the state government.

    Therefore with SPAN's interference, it was not surprising that the concessionaires rejected the state government's offer on 20th February, last Friday. We will like to call upon the Minister to explain the actions of his Ministry for sabotaging the efforts of the Selangor State Government.

    We will like to reiterate our position that if the offer from the Federal Government to acquire these assets and concessions at the same or lower price than what the Selangor state government has offered, we will not only agree to letting the Federal Government lead the negotiations, but also provide the Ministry with our full support and co-operation.

    If however, the Ministry offers the concessionaires a much higher cash value for its assets as well as lucrative license terms for them to continue as the water operators in the state, the Minister must explain why he is forsaking the rights and interest of 7.3 million population of Selangor and Kuala Lumpur.

    We will also like to emphasize to the Minister that under the law, particularly the Water Services Industry Act 2006, as well as the terms of the current concession contracts, the Selangor state is a counter-party to all previous and future agreements. Hence the attempt by the Federal Government to unilaterally negotiate with the concessionaires is illegal and will be subjected to future dispute and complications.

    Therefore, we call upon the Federal Government to respect the rights of the State and let the Selangor Government proceed with the negotiations with the concessionaires in the interest of the people of Selangor and Kuala Lumpur.

    Tony Pua, MP Petaling Jaya Utara

    Charles Santiago, MP Klang

    William Leong, MP Selayang

    Dr Dzulkifli Ahmad, MP Kuala Selangor

  3. #13
    Join Date
    Oct 2008

    Selangor accuses BN of bailing out water companies

    Selangor accuses BN of bailing out water companies
    By Neville Spykerman

    SHAH ALAM, Feb 26 — Selangor foresees a significant reduction in water tariffs for consumers if the state government is allowed to carry out the restructuring of the water services industry.

    The Selangor Water Review Panel today disclosed that the state government will be able to reduce water rates by 10 per cent next year from 77 sen per cubic metre to 69 sen.

    Petaling Jaya Utara MP Tony Pua, who is a member of the panel, said the cost of water can be reduced further by 20 per cent in 2011 to 61 sen per cubic metre and 25 per cent in 2013 to 57 sen per cubic metre.

    He said the reduction of rates is not impossible because Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBA) currently charges consumers an average of only 37 sen per cubic metre.


  4. #14
    Join Date
    Oct 2008

    Syabas boss says his RM5.1 million pay is justified

    Syabas boss says his RM5.1 million pay is justified
    By Neville Spykerman

    SHAH ALAM, Feb 26 — Tan Sri Rozali Ismail, the chairman of Syarikat Bekalan Air Selangor (Syabas) and Puncak Niaga Sdn Bhd, said today the RM5.1 million salary paid to him in 2007 for running the companies was justified.

    “If you want professionals to run your company, you have to pay professional fees.”

    Rozali, was speaking in response to the disclosures from the State Water Review Panel.

    During a media briefing earlier today, the panel also revealed that Syabas was financially stressed due to poor management practices, among them paying Puncak Niaga RM700,000 in management fee every month.


  5. #15
    Join Date
    Oct 2008

    Federal-state battle looms for Selangor’s water assets

    Federal-state battle looms for Selangor’s water assets

    KUALA LUMPUR, Feb 27 — A battle appears to be looming between the federal government and the state government of Selangor over the takeover of privatised water concessions in the state. At stake are billions of ringgit for the concessionaires and higher water tariffs for consumers.

    The move to restructure the sector could also become a political flash point with the Pakatan Rakyat accusing the Barisan Nasional of bailing out its cronies to the detriment of the public.

    In spite of its own designs to consolidate the sector, the central government had “gone off on its own tangent”, rather than work with the state, a panel set up for the reorganisation exercise said yesterday.

    This “sabotage” occurred when a central government agency — which had agreed to state-led talks earlier — inexplicably announced on Feb 18 that it would take over the negotiations and deal directly with the concessionaries.

    This about-turn came two days before a deadline for the companies to accept an offer by the state of RM4.6 billion for their assets (treatment plants and pipes), and another RM1.1 billion for their equity.

    The offer was subsequently rejected by the four concessionaires — Puncak Niaga (M) Sdn Bhd, Syarikat Pengeluar Air Selangor Holdings Bhd (Splash), Konsortium Abass Sdn Bhd and Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) — in the belief that the federal government would revert with a more attractive option.


  6. #16
    Join Date
    Oct 2008

    Federal Govt trying to sabotage Selangor Govt & bailout Water Concessionaires

    Selangor must stand firm on this issue and not succumb to the Federal Govt's machinations. Our best solution is to buy out the Water Concessionaires at the State level and manage the water ourselves. UMNO cannot afford for that to happen as it will allow Selangor to demonstrate that it can run the services more efficiently and cheaply than UMNO.

    Hang tight to the assets even if it means a higher water price now. Come GE 13, the people will throw UMNO out.

    Saturday February 28 2009

    Federal government to cut Selangor out of water deal

    By Shannon Teoh

    KUALA LUMPUR, Feb 28 — Plans are afoot to hand over control of water services in Selangor to Puncak Niaga.

    The move comes on the back of all four concessionaires rejecting the combined RM5.7 billion takeover offer by the state government in the ongoing tussle for control of water services in the Klang Valley.

    The federal government looks set to close out a deal with the concessionaires before a 30 per cent tariff hike takes effect on April 1 under the concession agreement with Syabas, which is 70 per cent owned by Puncak Niaga.

    However, Puncak Niaga is set to take over two fellow players, Splash and Abass, to make it the sole option to be appointed as the licensee for water services for over 1.5 million customers in Selangor, Kuala Kumpur and Putrajaya once the statutory transfer of all water assets in the Klang Valley has been completed.

    Selangor had cried foul over the move by the National Water Services Commission (Span), the regulatory body under the Ministry of Water, Energy and Communications, to declare that the federal government would commence negotiations with the concessionaires two days before the Feb 20 deadline for the companies to accept the state's offer.

    It claims that the move had effectively made Pengurusan Aset Air Berhad (PAAB), the wholly-owned subsidiary of the Finance Ministry created under the Water Services Industry Act to consolidate all water assets in the peninsula, a competitor in the acquisition of the privately held water assets.

    After acquiring the assets, the federal government is given the power under the law to appoint a licensee in each state to whom it will lease back the assets so it can operate water services.

    A member of the Selangor water review panel, which has been overseeing the deal for the state, told The Malaysian Insider that its move to take over all four concessionaires was a strategy to leave the federal government with no option but to appoint a state-controlled company as the licensee.

    Sources say that with the scuppering of Selangor's RM5.7 billion offer, Puncak Niaga will now meet Splash and Abass within a week to agree a takeover deal in principle while PAAB will make an offer for all the privately held water assets.

    The Malaysian Insider understands that the PAAB offer may be up to RM500 million less than Selangor's, giving it the appearance of being a better deal but it will not include taking over equity, which instead will be bought up by Puncak Niaga.

    But Selangor still holds some significant cards. It owns 80 per cent of water assets and could hold out until a compromise is reached.

    However, with the tariff hike hanging over its constituents, the Pakatan Rakyat government knows that it is a stalemate that could hurt it politically.

    It had tried to delay the tariff hike by demanding that the ministry revoke Syabas' 30-year concession due to non-compliance as found in a report by the National Audit Department, which includes exceeding capital expenditure allowances and engaging in direct negotiations instead of open tenders.

    However, the ministry responded by forwarding the matter to the Attorney-General and pressing Selangor to move ahead with the restructuring of assets.

    Full article here…

  7. #17
    Join Date
    Oct 2008



    2nd March 2009


    1. All Local Councillors of Majlis Bandaraya Petaling Jaya (MBPJ),
    2. All Local Councillors of Majlis Perbandaran Subang Jaya (MPSJ),
    3. All Members of Parliament (MPs) for Petaling District,
    4. All Members of Parliament (MPs) for Kuala Lumpur Federal Territories,
    5. All State Assemblypersons (ADUNs) for Petaling District,
    6. Chairpersons/Secretaries/Committee Members of All
    i. Residents Association (RAs),
    ii. Rukun Tetangga (RTs),
    iii. Non-Governmental Organisations (NGOs)




    This is to inform you that my office will be organizing a Public Briefing on the “Restructuring Process of Selangor Water Industry” at 8:00pm on 4th March 2009 in Crystal Crown Hotel, Petaling Jaya.

    The briefing is to provide detailed explanations to the public about the restructuring effort of the water services industry in Selangor. Of late, four major water concessionaires, namely Syabas, Slash, Puncak Niaga and Abass have decided to turn to the Federal Government to negotiate for a better deal which could result in higher water tariff (as high as 37% according to agreement) for the people of Selangor and Kuala Lumpur.

    The public briefing will be conducted in Bahasa Malaysia and English. In view of the short notice, I appreciate if you and your organizations could assist to mobilize and inform your members, friends and neighbors to attend the public briefing. Our panelists from the Water Review Panel appointed by the Selangor State Government will be present to brief the public.

    Thank you.

    Yours truly,

    YB Lau Weng San
    ADUN for Kampung Tunku

  8. #18
    Join Date
    Oct 2008

    Selangor Media Statement on Federal Govt Bailout of Water Concession Cos 030309

    40502 SHAH ALAM, SELANGOR, MALAYSIA. TEL: 603-554470032 FAX: 603-55109686


    SHAH ALAM – The Water Review Panel of the Selangor State Government views with concern the
    statement by Minister of Energy, Water and Communications Datuk Shaziman Abu Mansor made in an
    interview yesterday (Berita Harian, 3rd March 2009).

    He gave two reasons for wanting to speed up the process of restructuring the water industry in Selangor.

    First, he stated that the assets of all concession companies need to be taken over by 31st March 2009, or consumers would face an increase in the water tariff. The Water Review Panel would like to stress here that there will be no such increase in tariffs should the State Government take over the assets. Further, the State Government has written to the Minister requesting him to terminate the concession agreement with Syabas, due to their blatant breaches of the concession agreement. Despite Syabas’ obvious poor performance, lack of efficiency and corrupt practices, the Ministry still intends to give the operating license back to them after ending the concession agreement. This is totally unacceptable as the federal governmnet appears to be rewarding its cronies.

    His second reason is to help the concession companies bear the costs of borrowings and bonds that they currently cannot afford to. This is tantamount to an unacceptable bailout of these concessionaires. These private concessions have leveraged themselves to the maximum but at the same time, have paid themselves lucrative dividends. Hence, there is absolutely no justification for “helping” the concessionaires pay off these debt. By doing so, the Minister seems to be only interested in protecting the private interests of businessmen and not the consumers and taxpayers of Selangor, Kuala Lumpur and Putrajaya.

    This is yet another example of privatizing profit and socializing losses i.e. letting the rakyat pay for the inefficiencies of Syabas and Puncak.


    Link here…

  9. #19
    Join Date
    Oct 2008

    Forum: 6th Mar 2009 0800 pm Kuala Lumpur and Selangor Chinese Assembly Hall

    Selangor's Troubled Waters: Restructuring, Reforming or RAKYAT?

    The clock is ticking for the water industry of Selangor. Selangor is set to clash with the Federal Government in the dispute over the takeover of the lucrative private water concession companies in the State in efforts to nationalise the sector. The restructuring exercise has to be completed by March 31 deadline or 1.5 million consumers will have to pay higher water tariffs, which comes as bad news amidst an economic downturn. An unreasonably high price paid to the concession companies means taxpayers having to foot billions of ringgit.

    With consumers watching closely, it is set to be a political firestorm which could damage either the PR State Government or the BN Federal Government, or both.

    Hence, a public forum will be held to deliberate the issue above.

    Theme: Selangor's Troubled Waters?Restructuring, Reforming or RAKYAT?

    Date: Friday, 6th Mar 2009

    Time: 0800 pm

    Place: Kuala Lumpur and Selangor Chinese Assembly Hall (KLSCAH)

    Sponsor: Social Ecomomic Committee (SEC) of KL & Selangor Chinese Assembly

    Hall (KLSCAH) , SUARAM, Social Ecomomic Section of Selangor

    Hokkien Association, Social Ecomomic Section of Selangor & KL Teo

    Chew Association

    Moderator: Yong Yew Wei, Vice Chairman of SEC, KLSCAH?

    Speakers: Charles Santiago

    Dr. Subramaniam Pillay

    Syed Sharir (tbc)

    For further enquiries, please contact Mr. Chia , the assistant of KLSCAH at

    03-2274 6645.

    Thay Peng Hong

    Chairman of Social Ecomomic Committee of KLSCAH

    Moon Hui

    Coordinator of SUARAM

  10. #20
    Join Date
    Oct 2008

    Selangor, don't back down on water

    Selangor, don't back down on water
    S Pathmawathy | Mar 5, 09 5:31pm

    The Malaysian Trade Union Congress (MTUC) and the Coalition Against Water Privatisation (CAWP) have urged the Selangor government not to back down on their efforts to reclaim water management in the state.

    "Water, as other public or common goods, should never be in the hands of profit-driven businesses," MTUC president Syed Shahir Mohamud said today.


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