By Khairul Khalid
Puncak Niaga and Syarikat Bekalan Air Selangor (Syabas) have agreed to a state government takeover for RM5.58 billion, according to a joint statement by Kettha (Ministry of Energy, Green Technology and Water) minister Maximus Ongkili and Selangor Menteri Besar (MB) Khalid Ibrahim.
“Puncak Niaga has agreed to Selangor’s offer to takeover all equity, assets and liabilities of Puncak Niaga and Syabas totalling RM2.47 and RM3.11 billion respectively. This means that enforcing section 114 of the Water Services Industry Act (WSIA) will not be necessarily at this point in time,” said the joint statement.
Puncak Niaga owns two of the four water concessions in Selangor including a 70% stake in Syabas, the sole water distributor of water in the state. The other water concessionaires are Syarikat Pengeluar Air Selangor (Splash) and Konsortium Abass, a wholly-owned subsidiary of Selangor state.
Abass previously agreed to the state’s offer of a RM990 million takeover.
The remaining concessionaire to still stall on a deal with the state is Splash (Syarikat Pengeluar Air Selangor) who has been adamant that Selangor’s last takeover offer falls well short of their NAV (net asset valuation) of RM2.5 billion.
Splash has also indicated that they would consider legal action if they are forcibly taken over under WSIA without adequate compensation.
Splash is 40% owned by Gamuda, 30% by Kumpulan Perangsang Selangor (a unit of KDEB – Kumpulan Darul Ehsan Bhd) and 30% by The Sweetwater Alliance, a company linked to businessman Wan Azmi Wan Hamzah.
“The federal and state governments are reviewing the price of raw water to Splash. Nevertheless, Selangor is still ready to takeover Splash if it agrees to the last offer made in the MoU,” said the joint statement.
Early last month, the federal government enacted WSIA after three out of the four concessionaires failed to agree on the last offer of RM9.65 billion stated in the MoU (memorandum of understanding) to resolve the longstanding water restructuring issue.
Section 114 of WSIA provides for the forced takeover of the water assets under circumstances on national interest.
Nevertheless, despite the cabinet’s approval of WSIA, there has been reluctance by the federal government enforce it and Putrajaya has still insisted for a “willing buyer willing seller” deal between state and concessionaires.
Rozali Ismail
Rozali Ismail, chief executive officer (CEO) of Puncak Niaga and Syabas had conceded to a state takeover. Nevertheless, shortly after Putrajaya’s approval of WSIA, Rozali appealed to Selangor to reconsider the lapsed RM9.65 billion offer.
According to Khalid previously, a forced takeover under WSIA would save the Selangor state RM2 billion.
“The takeover is aligned with the amount agreed under the memorandum of understanding (MoU) signed between the federal and state government last February for a takeover of stater concessionaires totalling RM9.65 billion,” said the joint statement by Selangor and Putrajaya.
The Selangor state government will also continue discussions to sell and lease back the water assets from federal water asset management agency PAAB (Pengurusan Aset Air Berhad).
“The sale of Selangor water assets to PAAB for RM2 billion will help the state government to fund part of the RM9.65 billion proposed takeover of all four water concessionaires,” said the joint statement.
The federal and state governments has also agreed to form of a committee to monitor and fast track the construction of the Langat 2 water treatment plant.
“All the necessary permits and land approvals for Langat 2 will be issued as soon as possible, as per the agreement in the MoU and the Heads of Agreement that will be signed by the federal and state governments.”
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