Ex- Selangor MB Khalid’s removal could end up costing Selangor up to RM2.35 billion
(LSS) – One of the main reasons that led to former Selangor MB Khalid Ibrahim being kicked out in 2014 was the water restructuring deals that he signed.
The deal was eventually part-completed and signed by new Selangor MB Azmin in September 2015, despite Pakatan previously stating that they heavily objected to this deal.
The Federal government agency PAAB then advanced RM2 billion to Selangor repayable over 40 years as a lease payment. In return, Selangor surrendered RM2 billion in water assets to PAAB for 40 years.
PAAB also took over liabilities totalling RM7.694 billion from the Selangor govt arising from its purchase of SYABAS, ABBAS and Puncak Niaga – all based on the price set by ex-MB Khalid. (Who says Federal Govt doesn’t help Selangor? – that’s almost RM10 billion of help).
However, one key part and the most controversial part of the restructuring is not complete – the take-over of SPLASH.
Ex-MB Khalid had offered RM250 million to buy SPLASH based on the same formula that Selangor bought the over 3 companies but SPLASH objected.
SPLASH is 40% owned by Gamuda Bhd, 30% owned by businessman Wan Azmi Wan Hamzah and 30% owned by the Selangor Government.
Wan Azmi (pic) is part of PKR’s Institute Rakyat with Dr Wan Azizah Wan Ismail as he Chairperson.
In 2014, Wan Azmi had admitted that he had asked Anwar to bring him to see ex-MB Khalid to plead his case for a higher price for SPLASH but Khalid brushed him off saying the price offered was based on the same formula for the other 3 companies.
Khalid even cancelled the raw water license for SPLASH adding pressure o SPLASH to agree to the price.
Selangor could also request the federal government to invoke Section 114 of the Water Services Industry Act 2006 (Wasia), which allows a forced sale of water assets by water concessionaires at the offered price, should SPLASH continue to decline.
However, after MB Azmin took over he granted back the raw water license to SPLASH and also said it would give two years more to negotiate with SPLASH to agree on a price.
Over these two years 2014 and 2015, SPLASH continues to make big profits.
For the FY2014, Splash made pre-tax profits of RM379 million on revenues of RM417 million while for FY2015, it made RM331 million out of RM433 million.
Taking out Selangor’s 30% share, this means that the two year delay already cost the Selangor Govt a total of RM497 million – which they would have made if the original RM250 million offer was completed.
SPLASH has previously indicated that he believes the Selangor Govt should pay RM3 billion for SPLASH instead.of RM250 million.
The two years delay already cost Selangor close to RM500 million, will Selangor now pay RM3 billion instead of RM250 million now?
If they do pay this amount, Selangor govt would be poorer by a total of RM2.35 billion under Azmin when compared to the deal that Khalid was making.
Khalid’s removal could certainly end up costing Selangor billions of ringgit.
At that time when campaigning to remove Khalid, Rafizi protested that the price offered to SPLASH was unfair but could not answer when asked by forum participants how does it benefit Selangor if you pay RM2.8 billion instead of RM250 million to a private company.
Wan Azmi would walk away with RM900 millionwhile Gamuda will benefit with RM1.2 billion – on top of the two years extra profits, which they would not have gotten had Khalid remained in charge.
We shall see what happens next as the two years deadline will end this month and Azmin will be forced to announce the deal.
Any further delays or extensions would certainly raise even bigger suspicions on Azmin and Pakatan.
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