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Selangor to make the case for WASIA (Malaysian Reserve)

March 20, 2014
Thursday, 20 March 2014 10:00 R Kamalavacini ( Malaysian Reserve)
With Section 114, the state will have to buy the assets and liabilities of the existing water concessionaires without taking equity, says Abdul Khalid. (Pic by Ismail Che rus)
With Section 114, the state will have to buy the assets and liabilities of the existing water concessionaires without taking equity, says Abdul Khalid. (Pic by Ismail Che rus)

The Selangor state government will make its case to the federal government today for the invocation of the Water Services Industry Act 2006 (WASIA) to speed up the state’s water restructuring exercise.

Under the Act, reluctant private water concessionaires will be required by law to accept the state’s offer to take over water assets in Selangor which has been a sticking point in the water restructuring exercise to date.

Mentri Besar Tan Sri Abdul Khalid Ibrahim said he will meet with the Minister for Water, Green Technology and Water Datuk Seri Dr Maximus Ongkili to make the case to invoke Section 114 of the Act so that the water restructuring programme can proceed.

“I am going to request the federal government to invoke Section 114 sooner to kick start with the water restructuring implementation.

“With Section 114, the state will have to buy the assets and liabilities of the existing water concessionaires without taking equity,” he said in Shah Alam yesterday.

Asked whether the state government has legal recourse to force the federal government to invoke Section 114, Abdul Khalid said there is no recourse.

However, he explained that when the Selangor government and the federal government signed a memorandum of understanding (MoU) recently to resolve the water issue in Selangor, both parties unanimously agreed to work together.

“The federal government is committed to resolve this matter.

The MoU was signed to ensure that both parties are going to work together,” he said.

Abdul Khalid using section 114, the state government is required to buy over all the assets and liabilities of the four water concessionaires in Selangor for RM7.65 billion instead of RM9.65 billion.

“This will eventually reduce the acquisition cost, at the same time preserve the interest of the people of Selangor,” said Abdul Khalid.

Abdul Khalid also stressed that there will be no more amendments to the initial offer that Selangor gave to Syarikat Pengeluar Air Sungai Selangor Sdn Bhd, Puncak Niaga Sdn Bhd (PNSB), Syarikat Bekalan Air Selangor Sdn Bhd and Kumpulan Abbas Sdn Bhd.

The Section 114 of WASIA is designed in such a way that the concessionaires will have to surrender their assets and liabilities to the state government since the earlier negotiations had failed.

Hence, the Selangor government will automatically have to take control of the acquisitions, which will be done through Kumpulan Darul Ehsan Bhd, the state-owned company, for next course of action.

Following the Selangor water issues, PNSB’s share price dropped one sen to RM2.90 yesterday from RM2.91 with total volume traded at 1,585 million.

PNSB wholly owns the water treatment concession and has a 70% equity stake in Syabas, the state’s sole water distributor.

Gamuda Bhd, which holds a 30% equity interest in Splash, saw its share price up five sen to RM4.58 on Tuesday yesterday with total volume traded at 5.263 million.

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