Selangor seeks royal hand over water bondholders’ bailout

By Shazwan Mustafa Kamal, The Malaysian Insider

The Selangor government is planning a 100,000-strong protest to submit a memorandum to the Yang di-Pertuan Agong on December 5 over the federal government’s possible bailout of Syarikat Bekalan Air Selangor (Syabas).

Top Selangor Pakatan Rakyat (PR) leaders informed The Malaysian Insider last night that the state’s move was part and parcel of a plan to “pressure” the Najib administration not to proceed with a multi-million ringgit bailout of the state’s privatised water industry, and that state-wide ceramahs and gatherings had already been planned in advance to mobilise the numbers needed to attend the December 5 gathering at Istana Negara.

“We are planning a 100,000-people gathering on December 5 to submit (a) memorandum to the Yang di-Pertuan Agong on the water issue. Venue will be at Masjid Negara, 12pm.

“Details of memorandum has yet to be decided on but essence is demanding the return of rights of water to the rakyat, anti-privatisation. We want private (water) companies to be consolidated with the state,” said Petaling Jaya Utara MP Tony Pua.

The DAP national publicity secretary told The Malaysian Insider that the state government had planned 60 events from this week leading up to the date for the handing over of the memorandum.

“We have started the campaign to create awareness over the issue, prepared around 60 ceramahs around the state within the next three to four weeks. The ceramahs include with special focus groups, civil societies as well as church groups,” said Pua.

Sources told The Malaysian Insider recently that Selangor water bondholders will urge Prime Minister Datuk Seri Najib Razak to intervene directly in the state’s water restructuring deadlock in an effort to safeguard their bonds from being further downgraded.

The Malaysian Insider understands that major bondholders — including CIMB Principal Asset Management, Hong Leong Investment Bank and Great Eastern Life — have drafted a joint letter to Najib asking the federal government to bail out Syarikat Bekalan Air Selangor (Syabas) with a soft loan worth some RM1 billion.

In the letter, the bondholders contend that further downgrades of debt ratings will put capital markets at risk and will seriously impede the government’s effort to promote its Capital Markets Masterplan.

Putrajaya bailed out Syabas once already last year when it gave a RM320.8 million soft loan to parent company Puncak Niaga Holdings Bhd (PNHB) in December to help settle its debts to water treatment concessionaires.

It is understood that the bondholders intend to issue a separate letter to the Selangor state government by early December at the latest to push for a speedy resolution of the state’s water woes.

“The RM1 billion bailout reflects very badly on the Najib administration. We must be more competitive, transparent. What is happening is directly against the concept of the ‘era where the government knows best is over’. The government is taking people’s money to bail out weak companies,” said Pua.

He admitted however that initial response to the ceramahs so far has been “slow”, attributing it to a lack of planning on the part of the organisers.