The Kajang Move explained
Some PKR top brass wanted to set price of water assets, says Khalid
(The Star, 28 Feb 2014) – Selangor Mentri Besar Tan Sri Khalid Ibrahim disclosed that there were party leaders from PKR who were trying to influence the valuation of the water assets in the state.
He said some party leaders had introduced him to a few people who were trying to make their case as to why the pricing of the water assets should be higher.
“I have been an investment banker for so long that I look at the principle of valuation before determining the price (of the assets). I stood by my principle of valuation and set the price at RM9.65bil.
“These people wanted to set the price and wanted the valuation to justify their price,” he said in an interview with The Star yesterday.
Khalid also explained why the mechanics of the deal could not have been revealed to all and sundry in and outside of the party before the agreement with the Federal Government was signed on Wednesday.
He pointed out that the information, if revealed, would have an impact on the price of the stocks related to the water assets.
“I was also concerned about possible abuse of information and insider dealing. These are reasons why PKR leaders were not informed ahead of the signing on the water deal between the Selangor state government and the Federal government,” he said.
Khalid said he did not inform his party leaders due to those reasons to ensure that the implementation of the transaction was right and adhered to proper corporate governance.
On Wednesday, the Federal Government and Selangor finally found common ground on terms that would facilitate the implementation of the Langat 2 water treatment plant project and the takeover of water assets in the state.
Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili and Khalid signed a memorandum of understanding (MoU) that effectively broke a five-year impasse over the implementation of water projects in the country’s most industrialised state.
In the deal, the Federal Government agreed to the state’s acquisition of four water concessionaires, Syarikat Bekalan Air Selangor Bhd (Syabas), Puncak Niaga Sdn Bhd (PNSB), Konsortium Abbas Sdn Bhd (Abbas) and Syarikat Pengeluar Air Selangor Holdings Bhd (Splash) for a RM9.65bil compensation.
Khalid said that there was also concern that if there was misuse of information, the whole transaction would be regarded as void.
He said he went ahead to sign the MoU as the PKR leaders already knew about the deal since 2012 and the parameters of the transaction had not been changed.
“It’s part of the 2013 election manifesto. The factors such as ensuring steady tariff hikes and that the interest of the people in Selangor not being compromised are all there,” he said, adding that the Federal Government had also requested that they guard the information to ensure that the transaction was done in a professional manner.
Khalid was told that the Cabinet had agreed to terms only on Wednesday morning.
“They said ‘come and sign’. It was all done within a few hours,’’ he said, adding that he would call for a meeting to inform PKR leaders today.
On whether Putrajaya would keep to its deal, he said: “I am sure the Federal Government would keep to its side of the deal.”
The MoU binded everyone to their responsibilities, he noted.
“It will be unthinkable for the state or federal governments to reverse the arrangement,” he said.
Asked what he thought about Kajang by-election contender Datuk Zaid Ibrahim saying that PKR de facto leader Datuk Seri Anwar Ibrahim was out-manoeuvred by him on the water deal, Khalid said that based on his understanding, Anwar was not against the water consolidation exercise and the MoU.
Khalid attributed the success of the signing of the deal to Dr Ongkili whom he knew during their days at the Institute of Strategic and International Studies (ISIS).
He said both shared a common ground of resolving the issue and held on to the principle of no rent seekers taking advantage of the dealings.
