Concessionaires doubt invocation of Wasia has blessing of federal govt

(The Star) – An official in one of the concessionaires said that the invocation of the Wasia needed Cabinet approval. “Until we get the letter from the minister, it’s business as usual.”

Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim dropped a bombshell by disclosing that since the Government has elected to forcibly acquire the water assets in the state, the price will be lower by about RM2bil from its original RM9.65bil offer.

He also said the water concessionaires would be informed by the Energy, Green Technology and Water Minister about the invocation of the Water Services Industry Act 2006 (Wasia).

The concessionaires, however, said they had yet to get anything officially and expressed doubts if the statement by Khalid was sanctioned by the federal government.

An official in one of the concessionaires said that the invocation of the Wasia needed Cabinet approval. “Until we get the letter from the minister, it’s business as usual.”

Khalid’s comments came after the federal and state governments had on Tuesday issued a joint statement to announce that the federal government had decided to invoke the Wasia for Selangor to gain full control of the water assets in the state.

“When the federal government said it could help the state by introducing Section 114 under the Wasia, our calculation showed that it was only RM7.65bil,” Khalid told a press conference at his office yesterday.

“As far as we are concerned, there’s no need to go for international arbitration.”

The federal government and Selangor had, on Feb 26, entered into a memorandum of understanding (MoU) to end the five-year stalemate in Selangor over the state’s water sector consolidation.

Under the MoU, it was stated that the Government had the option of using the Wasia to nationalise water assets to ensure the security and sustainability of water supply to the public.

Subsequent to the MoU, Selangor made its sixth and last offer of RM9.65bil to acquire all the water assets and equities in the concessionaires – Puncak Niaga Sdn Bhd, Syarikat Bekalan Air Selangor Sdn Bhd or Syabas, Syarikat Pengeluar Air Sungai Selangor Sdn Bhd or Splash, and Konsortium ABASS Sdn Bhd.

The use of the Act will affect three out of the four concessionaires, as Konsortium ABASS had already accepted Selangor’s offer before the March 10 deadline.

Khalid said yesterday that the effective date for the handover of the water assets from the three other concessionaires to the state would be announced at a later date, adding, however, that it was expected to be not earlier than three months.

“Whether they (the concessionaires) accept it or not, the federal government will take over the water assets and place them under a special-purpose vehicle (SPV),” he said.

The SPV, he said, would be headed by Suhaimi Kamaralzaman, the president ofKumpulan Darul Ehsan Bhd and the former chief executive officer of Pengurusan Aset Air Bhd.

It is unclear at this stage how much each concessionaire will be paid for their water assets.

Khalid said that Konsortium ABASS would be paid the full amount offered by the state because it was the only concessionaire that had accepted the offer.

The federal government had, on Feb 26, said that it would inject RM2bil to help Selangor take over the water companies. It is likely that the top-up fund would now be used to pay for the equity portion of the acquisition.

Meanwhile, Khalid disclosed yesterday that the state would declassify the MoU signed between the federal and state governments. He said members of the public who were interested to view the document could now make an application to do so.

However, he stressed that the MoU could not be reproduced in any form.