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Thread: Selangor’s troubled waters

   
   
       
  1. #1
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    Selangor’s troubled waters

    The Federal Govt is trying to blackmail the State Govt. Selangor should implement rainwater harvesting immediately to cut down on water usage. Then we fight it out.

    Selangor’s troubled waters
    By Shannon Teoh

    JAN 8 — The clock is ticking for the Selangor and federal governments to sort out the sale of water assets in the state, failing which it could turn into a flood of negative publicity for both the Pakatan Rakyat and Barisan Nasional.

    Some 1.5 million consumers in Selangor, Kuala Lumpur and Putrajaya are facing a 30 per cent increase in water tariffs if water service assets — water treatment plants, dams and pipelines — in the state are not handed over to Pengurusan Aset Air Berhad (PAAB), the Finance Ministry's wholly-owned water assets management company, by March 31.

    Given the current climate of economic uncertainty, such an increase and its knock-on effects would be a devastating blow to whichever political coalition is perceived to be at fault.

    Under the 30-year concession agreement inked in 2005 between supply company Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) , the federal government and the Selangor government, periodical tariff hikes are provided for as long as Syabas meets certain conditions.

    Energy, Water and Communications Minister Datuk Shaziman Abu Mansor recently said that according to the "National Audit Department's estimates, Syabas could increase the tariff by 30 per cent although the agreement stated 37 per cent because the company had met almost all the conditions”.

    However, the concession can be revoked and the water tariff restructured after the assets have been handed over, according to Shaziman.

    An ongoing nationwide process of centralising water assets is due as the Water Services Industry Act 2006 requires all water assets except those in Sabah and Sarawak to be sold to the federal government, said to be a move to make water supply management more efficient.

    Under the Act, assets will then be leased back to the respective states to administer water supply to consumers.

    The Malacca government recently relinquished its assets for RM889 million.

    While the hike may be a useful bargaining chip to force the Pakatan Rakyat state government's valuation of assets downwards, standing in the middle of complex negotiations between the state administration and PAAB are the private companies which own part of the water assets in the state.

    Charles Santiago, of the Coalition Against Water Privatisation, told The Malaysian Insider that these companies could scupper any agreement by insisting on relying their own valuation of their assets and this could break down negotiations.

    Puncak Niaga, which has become synonymous with Selangor water supply, was established while Umno information chief Tan Sri Muhammad Muhammad Taib was then menteri besar.

    Its founder and executive chairman Tan Sri Rozali Ismail is known to be a close associate of Muhammad.

    Umno is understandably keen on regaining Selangor from PR. As such, there could be an internal conflict within BN ranks as to how to approach the situation.

    Shaziman has so far been making comments to the effect that PAAB could save Selangor from the impending tariff hike.

    This hike has already been deferred from Jan 1 to April 1, incurring a penalty for the federal government which may breach the RM100 million mark.

    But Umno elements in Selangor may want a tariff hike which could hurt PR. Muhammad is also currently running for the post of Umno deputy president and may want to show delegates that he is still an influential force.

    The question now is the valuation of the assets.

    The Malaysian Insider understands that all players are coming to the negotiation table in the next few weeks.

    It has been speculated that Puncak Niaga, which owns 70 per cent of Syabas, wants RM6 billion for its water assets.

    Selangor Menteri Besar Tan Sri Khalid Ibrahim claims that the company only treats 20 per cent of water supply in the state.

    Sources say that the state owns about 80 per cent of water assets but Shaziman estimates the total assets to be worth about RM5.5 billion.

    These figures clearly show negotiations may be protracted or even an impasse may occur, resulting in April's tariff hike taking effect.

    Santiago, who is the DAP MP for Klang, said negotiations will be fiery as all parties will attempt to use public opinion and the media to gain leverage.

    Appointed as an advisor to the state government on the matter, he expects private companies to be the bottleneck in talks as both federal and state representatives are desperate to tie up the deal.

    With consumers watching closely, it is set to be a political firestorm which could damage either the PR state government or the Barisan Nasional federal government, or both.

    http://www.themalaysianinsider.com/i...roubled-waters
    py

  2. #2
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    Selangor fights 30pc water hike, wants Syabas concession cancelled

    Selangor fights 30pc water hike, wants Syabas concession cancelled

    Posted by admin
    Tuesday, 20 January 2009 11:27
    By Shannon Teoh and Debra Chong, The Malaysian Insider

    The Selangor state government has signaled its intention to take on the federal government in a battle over water supply in the state after sending a letter to the Energy, Water and Communications Ministry asking for the 30-year concession agreement with Syarikat Bekalan Air Selangor (Syabas) to be terminated.

    While the immediate concern is to block a 30 per cent hike in water tariffs come April, the actual ramifications may stretch into talks that have begun in earnest this week over the sale of water supply assets – water treatment plants, dams and pipelines – in the state to the Finance Ministry’s wholly-owned Pengurusan Aset Air Bhd (PAAB).

    Under the concession agreement inked in 2005 between Syabas, the federal government and the Selangor government, periodical tariff hikes are provided for as long as Syabas meets certain conditions.

    Energy, Water and Communications Minister Datuk Shaziman Abu Mansor recently said that “according to the National Audit Department’s estimates, Syabas could increase the tariff by 30 per cent although the agreement stated 37 per cent because the company had met almost all the conditions”.

    http://mt.m2day.org/2008/content/view/17081/84/
    py

  3. #3
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    Syabas breaches contract

    http://www.sun2surf.com/article.cfm?id=29619

    Syabas breaches contract

    by Maria J. Dass Updated: 02:49AM Fri, 30 Jan 2009

    PETALING JAYA (Jan 30, 2009): An audit of Selangor's water concessionaire
    operations has revealed that the company had breached several important
    terms of the 30-year concession agreement, and the state government is using
    this to press for the lucrative contract to be terminated.

    It is learnt Syarikat Bekalan Air Selangor (Syabas) - owned by Puncak Niaga
    (70% share) and state investment arm Kumpulan Darul Ehsan Bhd (30%) - had
    failed to comply fully with the requirement for contracts to be awarded on
    an open tender basis.

    Sources said the audit showed that more than 72% of contracts worth a total
    of RM600 million were awarded to selected companies via direct negotiations
    and only 25% via competitive open tender, which clearly violates the
    agreement.

    In addition, the audit also found more than RM325 million in discrepancy
    between the summary of contracts awarded in 2005, 2006 and 2007 and Syabas's
    review document (referring to general accounts).

    The audit was a requirement before the company could be allowed to implement
    a tariff hike scheduled for Jan 1 this year. That has since been deferred as
    the Pakatan Rakyat state government is still in negotiations with the
    federal government on management of water assets and related issues.

    Syabas's concession agreement was signed between the federal and state
    governments and Puncak Niaga.

    theSun learnt the state has written a letter to the ministry asking for the
    concession agreement to be terminated.

    This is not the first time the question of breaches in the contract was
    brought up.

    In June 2005, then energy, water and communications minister Datuk Seri Dr
    Lim Keng Yaik announced that Syabas had breached the water privatisation
    concession by using imported pipes from Indonesia for its RM375 million pipe
    replacement project in the Klang Valley instead of sourcing them locally.

    He had produced several photographs as proof that Syabas had used pipes
    manufactured by an Indonesian company, PT Growth.

    Lim himself had then demanded for transparency.

    "This breach of contract is grounds for termination," a state official
    pointed out.

    Lim had at that time questioned Syabas's move in appointing a local company
    to procure the pipes when a special committee comprising officials from his
    ministry and the Finance Ministry had yet to approve the tender. It is not
    known what came out of Lim's public statement.

    Aside from the breach of contract issue, questions are also being raised
    over the RM51.2 million spent to renovate the Syabas office when the
    Selangor Water Regulatory Department (JKAS) only approved RM23.2 million for
    this in 2005. The audit review found that Syabas had failed to comply with
    the requirement as approved by JKAS.

    At the heart of this tussle over the water contract is the state government'
    s desire to see water tariff kept low to benefit the people of Selangor.
    When it came to power, among the first things the new administration did was
    to give free water up to 20 cubic metres a month.

    In December last year, Energy, Water and Communications Minister Datuk
    Shaziman Abu Mansor had said that according to the concession agreement,
    water tariff in Putrajaya, Selangor and Kuala Lumpur was to be increased by
    31% by January this year but the hike has been deferred to March 31 to allow
    the state government to restructure the water industry in Selangor.

    Shaziman said the 30-year concession agreement (from Jan 1, 2005 to Dec 31,
    2034) could be revoked and the water tariff could be restructured after the
    assets had been handed over to Pengurusan Aset Air Bhd (PAAB) which is under
    the Finance Ministry.

    Selangor, however, wants PAAB to allow the state to manage its own resources
    to ensure consumers pay a fair price without having to put up with scheduled
    hikes as per the agreement.

    Under the agreement, consumers face more water tariff hikes until 2034. The
    next hike of 25% is scheduled for 2012, followed by a 20% hike in 2015, a
    10% hike in 2019 and a 5% hike on 2021, 2024, 2027 and 2030.

    Negotiations between Puncak Niaga and the Selangor government are still
    under way with the state looking for a deal which will benefit the public in
    the long run whereas Puncak Niaga as a public-listed company is looking for
    the best value for its shareholders.

    Speculation is that the concessionaire is looking at beyond RM6 billion,
    based on capital expenditure and exit value. The matter will also be
    discussed at the Selangor state economic council (MTES) meeting today.
    py

  4. #4
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    MB: Selangor still waiting for Syabas audit response

    MB: Selangor still waiting for Syabas audit response

    SHAH ALAM, Jan 31 — The Selangor government is urgently waiting for a response from the Energy, Water and Communications Ministry on the audit report on water concessionaire Syabas Bhd, said Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim.

    "We wrote a letter more that a month ago to the minister concerned (Datuk Shaziman Abu Mansor) but have yet to get a reply. This is quite urgent because we need to resolve not only the concession awarded to Syabas but also on the restructuring of water industries in Selangor
    ," he told reporters after Kolej Antarabangsa Industri Pendidikan Selangor (INPENS) 13th convocation today.

    Khalid said this when commenting on a report in The Sun newspaper yesterday that the audit revealed Syabas had allegedly breached several terms of the concession agreement.

    The Selangor government wants the 30-year concession awarded to the company to supply clean water to consumers in the state to be terminated because of this.

    According to the newspaper report, the audit found the company had allegedly not observed certain important provisions for the awarding of contracts, among others.

    The audit was a requirement before the company could be allowed to implement a tariff hike scheduled for Jan 1 this year. That has since been deferred as the Pakatan Rakyat state government is still in negotiations with the federal government on management of water assets and related issues. — Bernama

    http://www.themalaysianinsider.com/i...audit-response
    py

  5. #5

    Re: Selangor’s troubled waters

    The Labor federal government in Australia has just launched an AU$ 250 million National Rainwater and Greywater Initiative as part of its AU$ 12.9 billion Water for the Future programme. This includes a rebate of up to AU$ 500 for the purchase of rainwater tanks or greywater systems. This looks like something that is worth studying.

    More details at:


  6. #6
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    Re: Selangor’s troubled waters

    Quote Originally Posted by Bob K
    The Labor federal government in Australia has just launched an AU$ 250 million National Rainwater and Greywater Initiative as part of its AU$ 12.9 billion Water for the Future programme. This includes a rebate of up to AU$ 500 for the purchase of rainwater tanks or greywater systems. This looks like something that is worth studying.

    More details at:


    Interesting link, Bob. That's better and more environmentally-friendly than just offering free 20 m3 water.
    py

  7. #7

    Re: Selangor’s troubled waters

    The costs involved seem a little high for a State Government though. Maybe this should be part of the PKR's national agenda.

  8. #8
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    Re: Selangor’s troubled waters

    Quote Originally Posted by Bob K
    The costs involved seem a little high for a State Government though. Maybe this should be part of the PKR's national agenda.
    I think it will have to be offset against the free 20m3 water. There are other benefits:

    Reduction in water consumption.
    Reduce the pressure to get more fresh water, the need for Kelau Dam.
    Reduce the rain water runoff into the drains and river system. Not that much but every little bit helps.
    Create a greater awareness of water conservation.

    I think it is a good idea.
    py

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    Tony Pua: We want our water back

    For Pakatan Rakyat to be a reality in the hearts of the people, it is time that our political leaders in DAP, PAS & PKR also think as PR, and not as DAP, PAS or PKR. Their writings and speeches should reflect that.

    Monday, February 02, 2009
    We Want Our Water Back Too!

    Amidst all the political hoollaboo over the state of affairs in Perak, and some say the rest of the country, you would be pleased to know that the Pakatan Rakyat government continues to exert pressure on the federal government and other relevant parties to provide a better deal for the people.

    You have read my multiple posts whether here, or in the media (the latest published yesterday in The Star) with regards to efforts DAP is making to press the Government to ensure a more equitable toll rate for our highways, or if not possible, then buy them back as provided for in the concession agreements.

    At the same time, I also sit in the Selangor Water Review Committee, which is appointed by the Menteri Besar in September last year. The committee also include Charles Santiago (DAP - Klang), Dr Dzulkifli (PAS - Kuala Selangor), William Leong (PKR - Selayang) and several other activists, have been very actively looking into how restructuring the water assets and distribution ownership can be done to remove similarly, extraordinary profits made by private concessionaires at the expense of the Selangor rakyat.

    While I had objected to the Selangor Government's plan for free water earlier, I'm in full support for its plans to take over the water distribution business from its current concessionaire, Syabas, which is 70% owned by Puncak Niaga Berhad.

    http://tonypua.blogspot.com/2009/02/...-back-too.html
    py

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    Govt delays Selangor water tariff review

    Govt delays Selangor water tariff review
    Posted by charlessantiago under water | Tags: selangor, water |

    Source : TheSun

    Maria J.Dass and Giam Say Khoon

    KUALA LUMPUR (Feb 19, 2009) : The government has decided to delay the water tariff review in Selangor following scrutiny by the National Audit Department of the parameters for water concessionnaire Syarikat Bekalan Air Selangor (Syabas) to justify the increase.These include the revenue for the period from Jan 1, 2005 to Dec 31, 2007 and billings, capital expenditure, bulk supply, non-revenue water reduction and distribution costs for the same period.

    The Energy, Water and Communication Ministry, in a written reply to the Dewan Rakyat, said that the tariff increase had been delayed to allow the Selangor government to restructure the water industry in the state by acquiring stakes in the water concession companies.

    More…
    py

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