By Khairul Khalid
Syarikat Pengeluar Air Selangor (Splash), one of the major players in the water saga, has come out swinging against the federal takeover of the state’s water assets via section 114 of WSIA (Water Services Industry Act). KiniBiz talks to Splash chairman Wan Azmi Wan Hamzah.
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Wan Azmi Wan Hamzah, chairman of Syarikat Pengeluar Air Selangor (Splash) has been outspoken in his response to the WSIA approval. He has been particularly scathing in his criticism of Selangor Menteri Besar (MB) Khalid Ibrahim’s handling of the water crisis.
“It’s shocking how Khalid has handled the water crisis. The MB has failed and hasn’t acted in the best interest of the rakyat. The whole thing looks amateurish. It’s all political brinkmanship. There have been so many lies and half-truths about the whole situation,” said Wan Azmi in an exclusive interview with KiniBiz.
WSIA allows for a federal intervention in the state’s water assets in national interest and was invoked after years of negotiations between state and concessionaires failed to yield a compromise.
When KiniBiz met Wan Azmi at his office early this morning, he had just taken a bath — in his office. “Water rationing at home. Had to come here and shower.”
The irony is not lost on Wan Azmi, chairman of the concessionaire that operates, among other things, the Sungai Selangor dam that supplies approximately 60% of water supply in Klang Valley.
Here are excerpts of KiniBiz’s interview with the Splash chairman:
KiniBiz: What’s causing Selangor’s water problems?
Wan Azmi: The current Selangor water problem has nothing to do with the takeover impasse.
In 2010, the then-Kettha (energy, green technology and water) minister Peter Chin had pointed the problem out to Khalid. Chin predicted a water problem for Selangor in 2014 unless something was done quickly. He was absolutely spot on.
The Selangor state just rejected it and had no urgency to approve Langat 2. They explained that it’s going to be yet another expensive project to be constructed in favour of cronies. Khalid also had other wonderful ideas to circumvent the need for Langat 2.
Now they’re scurrying around for solutions because they made a bad mistake. They postponed critical decisions and now they’ve got a major water problem. Clearly, they don’t have a contingency plan in place. To me it’s just shocking. It highlights the cynicism of the MB.
Even at this late stage when there is water rationing, he still is trying to use Langat 2 approval as a bargaining chip. That’s hardly acting in the interest of “rakyat didahulukan”. This is political brinksmanship.
KiniBiz: Are the water rationings effective?
Wan Azmi: All of us are producing water to the limits. Nobody is slacking. None of our water treatment plants have cut production due to poor maintenance or anything like that. What has been disturbing is the kind of attitude that has been shown within the context of the greater management of the water resources in Selangor.
A study was published a long time ago to project demand growth for Selangor’s water needs. The problem is we can’t say “oh, we’re gonna be short (of water) next week” and have another treatment plant rolled out. It’s not like buying a photocopier. When one breaks down, you go buy another one. These things take time.
KiniBiz: Have you been notified of Putrajaya invoking section 114 of WSIA?
Wan Azmi: We have not been officially informed. How serious are they (federal and state)? Even at this late hour when they are supposed to be invoking (WSIA), they have not even talked to us about the details.
We have not received any letter saying this (WSIA) is being done. Nobody has asked “where are the keys to your offices?” We have not been formally informed in black and white. I presume the minister’s definition of a federal “step-in” is essentially for one purpose only and that is to ensure to ensure that the supply of treated water that comes from these plants and concessionaires will not be threatened.
KiniBiz: What’s Splash’s next move?
Wan Azmi: If they take the route of section 114 WSIA and tell us “guys we are coming over”, they will almost certainly provoke a legal response. We won’t be appealing to the state government, just like Rozali Ismail (CEO of Puncak Niaga and Syabas) has done. We shall not submit on bended knees. They will have to break us down.
It all depends how the (Kettha) minister invokes section 114, if indeed he invokes 114. We hope he won’t because the question of asset sequestration is very tricky. It’s one long slippery slope.
KiniBiz: Why didn’t Splash accept the state’s previous offer to the concessionaires?
(Splash has been on record several times that Selangor’s last offer falls well short of their NAV (net asset valuation) of RM2.5 billion.)
Wan Azmi: We have accepted the state’s offers on two previous occasions, where the numbers looked reasonable. The latest offer is actually 90% less than what we accepted the previous two times.
Now, we see this strange phenomenon where some of the concessionaires that have underperformed are being offered 4.6 times book value and while others like us who have delivered are offered only 0.1 of book value. No wonder they (federal and state) need to use section 114 WSIA to make it (forced acquisition) all possible.
I find it very interesting when politicians talk about people who are greedy and contracts that are one-sided, but they are very scant on details. My own experience is that when politicians do this, you can almost guarantee that the public is being told lies to hide the failings of the politicians.
In 14 years have we delivered what we promised to deliver? Yes. Has anyone ever written us even one letter complaining that the quality of water we’ve produced is not up to standard? Have we defaulted at all in terms of performance? The answer is no to both. To come out with these vague accusations of unfairness and lopsidedness of contracts without details is a very dangerous game. The public should be very wary. Somebody’s telling fibs to hide their own failures.
With the de-privatisation exercise, I think this Selangor government will go down in history for rewarding the non-performers and punishing the performers.
KiniBiz: Did things turn sour (for Splash) after Pakatan Rakyat (PR) took over Selangor?
Wan Azmi: When you deliver nobody disturbs you. In the early days, we didn’t have any problems with the Pakatan government. They were more concerned about Syabas and all their problems. We were just minding our own business. Of course, there were moments we were upset because Syabas defaulted against us (in payments) as well, not only against the state.
We always tried to believe , maybe to a fault, that governments are honourable, responsible and will eventually come around to resolve the problem, as opposed to conspiring to an asset grab.
KiniBiz: Do you feel betrayed?
Wan Azmi: Of course I feel betrayed. My problem is it gets worse when you read things in the newspapers. It’s almost like two governments (federal and state) are ganging up to tear up long-term contracts. It’s so absurd. I just don’t know whether to laugh or to cry.
KiniBiz: How do you think this water crisis will pan out?
Wan Azmi: I’m a great optimist. Ultimately people will come to their senses and do the right thing after they have exhausted all possibilities. Khalid is fast exhausting his options. Eventually he will do the right thing, hopefully.
From the state’s point of view, if there was a genuine problem I would have expected them to contact us and discuss the issue. If the problem is the cost of water, I would have expected them to call us and maybe say “we know you have done a good job but we have a problem. Can we negotiate?”
We never had that overture (from Khalid). The acquisition (of water assets) is the objective, not the lowering of rates or anything else.
Yesterday: Is WSIA fair or vulgar?
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