Of Debt to Federal Government and Imminent Bail out to Water Concessionaires.
by Dr. Dzul
According to the Auditor-General Report 2009, the State of Selangor owes the Federal Government a sum of RM929.86 millions. It must be made known to all that 85% of the debt, an equivalent sum of RM705 millions were incurred as a result of procurement of water assets in the state. In accordance to the privatization of Selangor Water, a tripartite agreement between SYABAS, the State of Selangor and the Federal Government, where SYABAS assumed the role of PUAS (Perbadanan Urus Air Selangor) in the management distribution of of Selangor water.
When the Pakatan Government took over the state, it has been found out that the record of all water assets were incomplete in the water inventory of the state. The PR state government with the help of former engineers with the Selangor Water Supply Department (JBAS) initiated a thorough inventory; identification and reassessment of the value of all state’s water assets. These engineers were involved in the planning for Selangor and were also engaged in the building of the dams and some of the treatment plants of the state.
Prior to the reassessment, the value of state’s water assets were priced at RM1billion. Incidentally, the Federal Government insists on this value of the state’s water asset. However, after a thorough reevaluation by the state’s consultant engineers, the value of all state’s water assets is priced at RM10.98billions.
If the State Government of Selangor is allowed to take over all assets of the concessionaires, consolidate them and later transfer it to the PAAB (Perbadanan Aset Air Berhad), a special purpose vehicle established under the Water Services Industrial act (WSIA, 2006), the State Government of Selangor will not only be in a better position to pay the debt owed to the Federal Government but as well will be in possession of an additional asset worth RM9billion. Hence, the issue of state government’s debt doesn’t arise as agreed with the Auditor General.
Latest statement from the Minister of Energy, Green Technology and Water, DS Peter Chin has now made it very imminent that the Federal Government is most likely to bail out the water concessionaires in the state of Selangor to the tune of RM6.4billion. This will surely vindicate the claim of Opposition and the NGOs that the BN government has a penchant to ‘privatise profit and nationalize losses’.
