EPISODE 24: Don’t talk about Kelantan, look at Selangor

The Current Assets for 2011 was RM1,739,983,000. The Current Liabilities for 2011 was RM2,388,970,000. All these indicate that Puncak Niaga is a bankrupt company (PN17) and should not be allowed to continue managing the water resources in Selangor and that the Privatisation and Concession Agreement should be terminated.


Raja Petra Kamarudin

Kelantan rapped for not providing clean water

PROLONGED ISSUE: Supply to 39 schools in state at critical level, warns deputy minister

THE Pas-led Kelantan government needs to do more in providing cleaner water to the rakyat in the state, especially in schools, the house was told yesterday.

Deputy Education Minister Dr Puad Zarkashi (BN-Batu Pahat) said his ministry was working with the Health Ministry to look into improving the water quality in Kelantan. However, Puad said efforts should not be done only by the Federal Government. He added that the state government must also step in and look at the problem seriously.

“We are urging the state government to take the issue seriously as it has been prolonged. Perhaps, the state government would want to consider setting up a steering committee to look into possible solutions to solve the water problem.”

Puad was replying to a question by Datuk Ibrahim Ali (Ind-Pasir Mas) on whether the Education Ministry intended to implement water supply projects in the state as the students have long been supplied with contaminated water that affects their health. Puad said the education ministry had identified 39 out of 77 schools in Kelantan which were at a critical level of water supply.

“Several initiatives have been taken by the ministry to improve the situation. The Health Ministry has sent their officers to monitor the water condition in Kelantan and the ministry is trying to look for alternative water sources for the schools.”

Puad also urged the state water management company, Air Kelantan Sdn Bhd, to increase the quality of water to the schools.

In 2009, the Auditor-General’s Report stated that the quality of water supply in Kelantan did not meet the standards set by the Health Ministry. The report had stated that Air Kelantan did not place priority in cleaning its water pipes. Kelantan has 28 water treatment plants.

Puad said the government had allocated RM27.3 million since 2008 for the construction of 91 tube wells. Of that number, 83 have been completed while the remaining eight are still under construction, he added. — New Straits Times


That was what the New Straits Times reported on 27th March 2012 regarding the water problem in Kelantan. Actually, I had already written about this 12 years ago on 28th September 2000 in an article called: Killing the Kelantanese with no water. I again wrote about it last year on 23rd November 2011 in an article called: You first have to know the meaning of the word (read the article here: http://www.malaysia-today.net/mtcolumns/no-holds-barred/45210-you-first-have-to-know-the-meaning-of-the-word)

Okay, while Umno and Barisan Nasional scream about the water problem in Kelantan, allow me to also scream: but this time about the water problem in Selangor. Both states, incidentally, are under Pakatan Rakyat administration, but the problem in Selangor is different from that in Kelantan.

The Selangor State Government has been having a long-running battle with the Barisan Nasional Federal Government regarding the consolidation of the water industry in Selangor — to place it under a company 100% owned by Selangor and to dismantle the privatisation of the water industry currently under the control of water concessionaires.

The main obstacle in getting the Federal Government to agree to this plan is, of course, because of the involvement of Umno cronies in the Selangor water industry, namely Tan Sri Rozali Ismail (picture below) through Puncak Niaga (M) Sdn Bhd (PNSB) and PNSB’s subsidiary, SYABAS.

Tan Sri Rozali Ismail, shareholder and Chairman/Director of Punck Niaga (M) Sdn Bhd.

Through the consolidation of the water industry, Rozali will stand to lose a colossal amount of money as he has over-extended himself and will only agree to a pricing that recognises his “future loss of business and profits”.

Selangor, understandably, will not agree to compensate him for future profits as the State Government’s contention is that the pricing must be based on the assets to be taken back from the concessionaires, which they had earlier acquired from Selangor.

A closer look at the financials of PNSB will tell the story as to why Rozali needs to cover “future profits”. His companies are more or less bankrupt so he wants to make money the quick way at the expense of Selangor and the Malaysian taxpayers.

Please note that when Rozali was given the water concession and the privatisation rights, he was then the Treasurer of Umno Selangor. And do you have to be a genius to figure out where the bulk of the “funds” derived from the privatisation went to? 

In short, as in most of these cases, Rozali was acting as a front for Umno and the money went into Umno’s pocket. Now do you know how general elections are reduced to BUY-elections?

Just like in the Tan Sri Tajudin Ramli and MAS case, I suppose, Rozali must be saying to himself: why should I carry the loss alone since this scheme was to enrich Umno and I was merely Umno’s nominee?

To further understand the numbers, please read the following documents:

1) Puncak Niaga Financial Statement FYE 2011 (http://www.malaysia-today.net/files/Puncak-Niaga-FYE-2011.pdf).

2) Puncak Niaga Announcement on PN17 Waiver (http://www.malaysia-today.net/files/Puncak-Niaga-PN17-Waiver.pdf).

3) Puncak Niaga Financial Statement FYE 2010 (http://www.malaysia-today.net/files/Puncak-Niaga-FYE-2010.pdf).

1) From Puncak Niaga’s Financial Statement FYE 2011, in particular the Condensed Consolidated Statement of Financial Position on page 4, you will see that:

a) The Current Assets for 2011 was RM1,739,983,000

b) The Current Liabilities for 2011 was RM2,388,970,000

(This gives the company a Nett Current Liability position of RM648,987,000)

c) The total equities is in deficit to the tune of RM16,053,000


All these indicate that Puncak Niaga is a bankrupt company (PN17) and should not be allowed to continue managing the water resources in Selangor and that the Privatisation and Concession Agreement should be terminated.

2) From the Puncak Niaga Financial Statement FYE 2010 on page 259, you will see that:

i) The Executive Directors’ Remunerations amount to RM15,580,872

ii) One of them earned between RM6,800,000 to RM6,900.000

Given the above and also:

1) That PNSB/SYABAS has not been able to reduce the Non-Revenue Water — which currently is above 30% (when it should be not more than 20%) — due to non-replacement of pipes, as provided in the Concession Agreement. 

2) That SYABAS has been paying the water treatment companies only about 40% of their bills since Pakatan Rakyat took over the state government. (The companies are now suing SYABAS for about RM2 billion in unpaid bills).

3) That SYABAS has also refused to approve the water supply for new development projects in Kuala Lumpur and Selangor, thus jeopardising the Selangor as well as the Federal Government’s ‘Transformation Plan’ — as no new development projects, residential, commercial and industrial, will be approved by SYABAS.

The relevant questions that we now need to ask are:

1) Why is it that the Federal Government will not allow Selangor to terminate the Concession Agreement with PNSB and SYABAS?

2) Why is it that the Bursa has given PNSB a waiver when clearly it is already a bankrupt company?

3) Why is it that the Federal Government will not insist that SYABAS approve water supplies for new development projects in Selangor?

Prime Minister Najib Tun Razak is going around Selangor telling the business community that all these water issues will be resolved once and if Barisan Nasional were to win back Selangor, just like they are telling the Kelantanese that they will get better quality water once and if Umno wins back Kelantan — in the meantime you can die of Cholera, which many are.

Of course, this will be at the expense of the rakyat, as SYABAS has been asking for a 37% increase in the rates since 2009 — as provided for in the Concession Agreement — and another 25% increase, supposed to be in 2012.

So, if Barisan Nasional were to win back Selangor, all the government needs to do is to approve the rates increase, as requested by SYABAS, and pay them back the amount of “short-fall” in their billings for the last few years since Pakatan Rakyat took over the state in March 2008.

In short, it will be a windfall for SYABAS if Umno takes back the state — just like how the government has promised the FELDA settlers and every man and his dog a “windfall” if Barisan Nasional wins the coming general election.

The bottom line is: Umno just can’t afford NOT to win back Selangor. There is just too much money involved here. And that money is our money, money belonging to the Malaysian taxpayers.

Do you need one reason why Pakatan Rakyat must not lose Selangor? I can give you many billions of reasons. And those billions are tied to just one issue: the water privatisation in Selangor and the billions, which have gone, and which will continue to go, into Umno’s pockets.