Pakatan Rakyat Media Statement on Selangor Water
Media statement by Rafizi Ramli, Tony Pua and Dr Dzulkefly Ahmad on Wedmesday, 2 April 2014 in Kuala Lumpur
Gamuda’s Datuk Lin Yun Ling is in no position to preach about “the sanctity of contracts” to justify the attempt to hold the Selangor citizens to ransom to maximise his shareholder profits
Gamuda Bhd’s chief, Datuk Lin Yun Ling has come out to question the sanctity of government contracts as the federal government prepares to invoke Section 114 of the Water Services Industry Act 2006 (WASIA) to take over Selangor’s water operations.
As reported by the Edge Financial Daily last Friday, he said “when investors look at it, they will question where the sanctity of the contract is. Why can’t they do it on a ‘willing buyer, willing seller’ basis? The blame will be on the federal government because it is the only one who can invoke WASIA.”
It is completely hypocritical for Datuk Lin to preach “the sanctity of contracts” when in the water concessionaire contracts which Gamuda’s subsidiary, Syarikat Pengeluar Air Selangor Holdings (SPLASH) willingly signed, there were clear terms set out for the purposes of terminating the concession and buy back by the Federal and/or state governments.
The terms were very clear in these agreements, where in the event of terminating the concession, the Government will have to compensate the concessionaire by acquiring the value of the water assets under the concession, as well as to ensure that the concessionaire will receive a mininum return of 12% per annum for the previous years of operations. The Government is not even legally obliged to take over the loans which have been undertaken by the concessionaires, as the Federal Government has done for SPLASH.
Hence, it is clear that it is Datuk Lin himself who is refusing to abide by the contract which his company has signed gleefully, and not the state or federal government. It is Datuk Lin who refuses to honour “the sanctity of contract” because he wants unreasonable returns for his shareholders.
In fact, what Gamuda is doing is absolutely disgraceful. The company is holding the rakyat to ransom by refusing to agree to a more-than-reasonable price offered by the Selangor state government, a price which is higher that what Selangor is legally obligated to offer under the concession agreements. Gamuda is obviously using its current ownership of the concession which treats vital water to be provided for Selangor residents, to extort a more lucrative offer from the state government.
Worse, when the Water Services Industry Act (WSIA) was passed in 2006 which gives power to the Minister to exercise takeovers of the water companies in the event of public interest, Gamuda or SPLASH did not even object to the Act. There can be no doubt that there is a water crisis in Selangor of which Gamuda is a part of, and it must be resolved immediately.
Hence, Datuk Lin isn’t only refusing to honour the sanctity of the concession contracts, he wants to defy the law which was drafted by the BN Government in consultation with the privatised water industry players.
Datuk Lin wants the water deal inked not on a “willing buyer, willing seller” basis. He wants a “delirious seller, extorted buyer” deal. Datuk Lin forgets that unlike normal private business transactions, this is a concession granted by the Government. Under all normal concessionary terms throughout the world, as per SPLASH contract, the Government is only responsible for a refund of the investment made, and a minimum stipulated return on the investment for the operating years. The state government has tried its best to conduct a “willing buyer, willing seller” deal for the past 6 years without success.
Therefore Pakatan Rakyat fully supports the position of the Selangor Menteri Besar, Tan Sri Khalid Ibrahim and the state government to demand that the Federal Government immediately exercise its powers under the WSIA to urgently complete the restructuring of the industry so that the state government can focus its investments to raise both the quantity and quality of water supplied to the suffering consumers.
Pakatan Water Panel
Dr Dzulkefly Ahmad