Selangor Water Impasse: Will Tun Dr.Lim Step Up to Resolve It?
More than 72% of contracts, worth RM600 million, was awarded through direct negotiation, not open tender process. Between 2005 – 2007, RM325 million could not be accounted for between Syabas public accounts and the record of contracts. RM51.2 million, or 120% more than the RM 23.2 million approved by Jabatan Kawalselia Air Selangor (JKAS), was spent on Syabas office renovation.
By Koon Yew Yin
Empty Promise of Reform
On 12 February 2008, Dato’ Seri Dr. Lim Keng Yaik, the Minister of Energy, Water and Communication, wrote in the foreword to the book, ‘The Water Tablet: Malaysian Water Reforms’ that “The reform model [in the water services industry] that we are embarking on is unique and I hope it will serve as a guide to developing as well as developed countries.” (p. v)
Tun Dr. Lim (he was Dato’ Seri at that time) was referring to the ceding of power of the states in regulating the water services industry to the Federal Government, and to the establishment of a national water resources regulator, SPAN.
The Secretary General of the Ministry, Dato’ Dr. Halim Man, in his foreword, promised that “The Ministry will play a vital role in the reform process”. Further he stated that the national objectives “include establishing a transparent and integrated structure for water supply and sewerage services, ensuring sustainability of water supply, tariffs … through the effective and efficient management of water supply services.” (p. viii)
Less than three years later, the reform process and achievement of the national objectives are a mirage, if not in tatters.
Tear-gassed protesters
On Sunday, 5th December, thousands of protesters turned up in front of the National Mosque to support the handing over a memorandum on the Selangor state water issue to the Yang di-Pertuan Agong, Tuanku Mizan Zainal Abidin.
The reason for the protest was that the consumers felt that the water concession contracts which were awarded without open competitive tender will result in exorbitant water rates that will impoverish them and their children. They were tear-gassed for their concern.
According to Charles Santiago, the Coalition Against Water Privatisation coordinator, Selangor needs to take over the state’s water industry to ensure that the people received cheap and good quality water. “If the state government does not take over, there will be a 37% tariff increase followed by a subsequent 25% and 20% increase within the next six years,” he said.
This concession agreement was approved by the Federal Government in 2005. In fact, the Barisan Nasional government privatised the water industry to four different companies from 1996 onwards but this privatization has resulted in corruption, wastage and mismanagement, with the Selangor case probably being the worst of the cases.
Tan Sri Rozali paid Rm 21,795 per day in 2009
According to Puncak Niaga Holding Bhd’s audited account for 2009, The CEO of Syabas, Tan Sri Rozali Ismail, was paid Rm 6.8 million. Tan Sri Rozali Ismail is also treasurer of Selangor UMNO. Recent news reports have contained allegations that Syabas imported RM 375 million worth of pipes from an Indonesian company owned by Tan Sri Rozali Ismail instead of sourcing locally in June 2005.
More than 72% of contracts, worth RM600 million, was awarded through direct negotiation, not open tender process. Between 2005 – 2007, RM325 million could not be accounted for between Syabas public accounts and the record of contracts. RM51.2 million, or 120% more than the RM 23.2 million approved by Jabatan Kawalselia Air Selangor (JKAS), was spent on Syabas office renovation.
Meanwhile, the profits of Puncak Niaga, the holding company of Syabas has dropped from RM364.5 million in 2005 to RM21.57 million in 2008. The total debt of the Selangor water privatized companies is RM6.4 billion but they have been paying dividends amounting to more than RM700 million to-date.
In December 2009, the Federal government provided a RM320.8 million back-loaded interest free unsecured soft loan to Puncak Niaga, the holding company of Syabas to settle their debts. The Federal Government is reported to be looking into another RM1 billion bail-out of Syabas at the end of this year.
If this is an example of the New Economic Model, then God help our country. All Malaysians, whether from Selangor or from other states, must demand full transparency and accountability on this issue.
Tun Dr. Lim has been quiet in this entire episode but I am sure that he is very concerned that his legacy of water reform as described in his own words “for the benefit of our successors and future generations” is now at great risk. I am also sure that he has insights to help resolve this impasse since he was the Minister in charge of water utilities when it was first set up as a federal portfolio. As a fully retired man, he should have plenty of time to respond to questions on the Selangor water issue.
It will be timely for Tun Dr. Lim to renew his ‘national service’ by giving us the benefit of his expertise on how to resolve the Selangor water impasse and help to ensure that what has taken place will never again happen in the country.
A good lesson for the Government to remember
My own advice is that it is the height of economic foolishness to award concessions or contracts without open competitive tenders. This warning is for all the 131 projects that are being envisaged under the Economic Transformation Programme (ETP) including the MRT project which is supposed to transform Malaysia into a high-income nation.
