Azmin: No bias, negotiations with Splash only starting next year

(Malay Mail Online) – Selangor Mentri Besar Azmin Ali today denied giving Syarikat Pengeluar Air Selangor Sdn Bhd (Splash) “preferential treatment” by stalling the state’s water restructuring exercise, saying that negotiations will only start next year.

Responding to his predecessor Tan Sri Khalid Ibrahim’s claims, Azmin pointed out that Splash had been given a year to decide on the buyout plan from when the master agreement on Selangor’s water restructuring deal was signed with Putrajaya back on September 12.

The master agreement, Azmin pointed out, was signed by Khalid himself.

“We haven’t started negotiations with Splash.

“According to the master agreement Splash has been given one year- from September 12 until September 2015,” he told reporters when met at a state function at the De Palma hotel here.

“(The negotiations) with Splash will start maybe beginning 2015,” he added.

The water concessionaire is the sole company still refusing to accept the buyout terms made by Khalid before he resigned in September.

Calling the delay of the state’s water restructuring agreement with Putrajaya “shockingly embarrassing” and “highly unacceptable”, Khalid pointed out that the restructuring exercise has  taken six years with no visible end in sight.

“Therefore, it would not be too drastic nor brutal at present for the current state administration to push the federal government to invoke the WSIA 2006 (Water Services Industry Act) so as to put an end to any further delays in the long-drawn-out restructuring exercise since there is no justification whatsoever to veer off from the existing terms in the KDEB’s (Kumpulan Darul Ehsan Berhad) takeover offer to Splash, which are reasonable, fair and consistent with those applied to the three other concession companies,” he said in a statement to Malay Mail Online.

Section 114 of the Water Services Industry Act 2006 allows Putrajaya to forcibly acquire a concessionaire.

Khalid was responsible for minting state’s water restructuring deal with Putrajaya a few months back in which Selangor’s buyout will assume Splash’s water related liabilities amounting close to RM1.6 billion, apart from the equity compensation in cash consideration worth RM250.6 million.

Of the four concessionaires, only Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Sdn Bhd and Konsortium Abbas Sdn Bhd have agreed in principle to Selangor’s combined offer of RM7.817 billion.

Splash has said it will negotiate its acquisition separately, as it wants a book value of at least RM2.8 million.

Gamuda group managing director Datuk Lin Yun Ling was quoted by Bernama on December 4 as saying that Selangor’s acquisition should be done in a “market-friendly” way.

In response to this, Khalid said Splash’s figure demand was “appalling” since the book value amounted to almost RM1 billion in excess compared to Selangor’s original RM1.83 billion takeover offer of the water concessionaire.

Azmin also denied that his administration was considering paying Splash RM2.8 billion, saying “there is no commitment from [the] state to pay” the hefty amount.

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.

Khalid has said the asset injection will go to a new entity, Pengurusan Air Selangor Sdn Bhd, 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: Syabas, Puncak Niaga, Konsortium Abbas and Splash.

The new special purpose vehicle will be under the control of state-owned KDEB.

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

Separately, the assets and liabilities of the three concessionaires that have agreed to the terms will be transferred to Perbadanan Aset Air Berhad 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 by the National Water Services Commission, along with the proposed 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 from office.