MMC eyes takeover of Johor water assets

(The Malaysian Insider) – While all eyes are on the reported water crisis in Selangor, tycoon Tan Sri Syed Mokhtar Al-Bukhary’s MMC Corp Bhd has eyes on Johor’s water assets.

Two weeks ago, MMC managing director Datuk Hasni Harun disclosed a joint-venture deal to take over Johor’s top water concessionaire Aliran Ihsan Resources Bhd (AIRB). The conglomerate would be forming a special vehicle with Pengurusan Aset Air Bhd (PAAB), a wholly-owned company under the Minister of Finance Incorporated, The Edge Financial Daily reported.

AIRB is 62.82 per cent-owned by MMC and is the third-largest supplier of treated water in the country.

The deal is estimated to be worth RM181.12 million, another paper, Business Times, had reported earlier this month.

“Yes, there was a presentation and they do have such plans (to take over the water assets), but the proposals have not been thought through yet… there’s still a lot of grey areas,” The Edge Financial Daily quoted an unnamed government official as saying.

But the paper also cited some government officials as saying MMC could be facing roadblocks in realising its plan as its proposal ran counter to PAAB’s aim, which is water asset nationalisation.

“It is not easy for MMC to venture into the water sector after PAAB was given the mandate to develop and manage the country’s water assets. It will be a step backwards, after the privatised (water assets) were bought back by PAAB only a while ago,” The Edge Financial Daily quoted another government official as saying.

PAAB was formed in 2006 to regulate the treatment and supply of water nationwide, which had previously been controlled by each respective state government.

The Edge Financial Daily reported too that in states where the water services had been privatised, various problems had cropped up, impacting operations. 

The latest is Pakatan Rakyat-governed Selangor, where water treatment and supply appears to have become a political issue in the run-up to national polls due soon, with the resource being handled by Syarikat Bekalan Air Selangor (Syabas), a company majority-controlled by Tan Sri Rozali Ismail, who is also Selangor Umno treasurer.

Syabas has warned of an impending water shortage in Selangor due to the lack of a treatment plant but the state government has alleged that it is a manufactured crisis.

Putrajaya has formed a special Cabinet committee, which is meeting today, chaired by Deputy Prime Minister Tan Sri Muhyiddin Yassin, to discuss the issue of the availability of treated water and the need for another treatment plant that will be ready at least two years down the road.