Selangor to demand full public disclosure of Khalid’s water deal

(Malay Mail Online) – Selangor Mentri Besar Azmin Ali said today he will write in to the federal government to demand that it publicly discloses all contents of the recently-signed water restructuring agreement with his predecessor Tan Sri Khalid Ibrahim.

Azmin said today that such a move is a necessary first step in reviewing the state’s controversial deal with Putrajaya, and that public scrutiny would help ensure the water restructuring exercise went through an open tender process.

“I will write to the federal government to allow the agreement to open to the public. My officers will help me draft my arguments, we will send it in a week’s time,” he told reporters after chairing a special state economic action council (MTES) briefing on the matter.

Azmin said the contents of the water deal is being kept confidential under the Official Secrets Act (OSA), and that the previous Selangor government had signed it without including any clauses or “particular requests.”

“We want the state to have the power to ensure that the process is done via open tender and that the costs of the Langat 2 operations will not burden the people,” the Bukit Antarabangsa assemblyman added.

Under the water agreement, Selangor will infuse a new special purpose vehicle with RM14.92 billion in assets to manage the water restructuring exercise now finalised with Putrajaya.

Ex-MB Khalid said last month the asset injection will go to a new entity, Pengurusan Air Selangor Sdn Bhd (Air Selangor), which will come into operation after the state concludes the takeover of assets and liabilities currently held by water concessionaires operating in Selangor.

The federal government will also provide RM2 billion to help offset the state’s cost of taking over the four concessionaires — Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Sdn Bhd (Puncak Niaga), Konsortium Abbas Sdn Bhd (Abbas) and Syarikat Pengeluar Air Selangor Sdn Bhd (Splash).

The new SPV will be under the control of state-owned KDEB.

Of the four concessionaires, Syabas, Puncak Niaga and Abbas have agreed in principle to Selangor’s combined offer of RM7.817 billion, while the Splash acquisition will be negotiated separately.

Khalid’s administration had initially made a combined offer of RM9.651 billion to take over assets and liabilities of the four concessionaires.

Splash rejected the offer outright, however, prompting threats by the state to push for the enforcement of Section 114 of the Water Services Industry Act 2006 (Wasia), which allows Putrajaya to forcibly acquire a concessionaire.

Separately, the assets and liabilities of the three concessionaires that have agreed to the terms will be transferred to Perbadanan Aset Air Berhad (PAAB) on a 45-year lease, covering all liabilities such as water debts and bonds valued at RM6.1 billion, and water assets owned by the concessionaires.

The facilities and service licences will be issued to Air Selangor by the National Water Services Commission (Span), along with the Langat 2 water treatment plant which will be leased to and managed by Air Selangor.

The water restructuring plan and the Langat 2 project were among several reasons given by PKR in deciding to remove Khalid as MB.