By Khairul Khalid
The Selangor government should not approve the Langat 2 water treatment plant after the water concessionaires failed to accept the state’s latest offer in the water MOU (Memorandum of Understanding), said Tony Pua MP (Member of Parliament) for Petaling Jaya Utara.
Tony Pua
“The water industry restructuring has returned to square one,” said Pua. “The federal government has failed to cajole these concessionaires into accepting the above offer and failed to live up to its end of the bargain. Therefore, the Selangor state government no longer needs to grant all the additional approvals required for Langat 2.”
The PJ Utara MP now urges the federal government to intervene by using its discretionary powers under the Water Services Industry Act (WSIA).
“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 (WSIA), particularly using Clause 114 to compulsorily acquire these water companies based on the compensation model detailed in the concession agreements,” said Pua.
Last month, the Selangor and federal government signed the MOU to facilitate the RM9.65 billion take over of the state’s water concessionaires and the approval of the long delayed Langat 2 water treatment plant.
Yesterday was the deadline for the concessionaires to accept the latest offer by the Selangor government. Out of the four concessionaires, Kumpulan Abass (a subsidiary of the Selangor state) accepted.
Construction company Gamuda that owns 40% of Splash has rejected the new offer outright citing that it “is not reasonable for acceptance by the company.” Puncak Niaga and its subsidiary Syarikat Bekalan Air Selangor (Syabas) have reverted with a list of several conditions to be met before they are willing to consider the offer.
These conditions include a higher return on equity of 15% instead of 12%, the full payment of compensation for the non-increase in tariff hikes, the rejection of due diligence on their assets and the rejection of international arbitration.
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