Selangor to save RM2b in takeover of water firms


Ikhwan Zulkaflee, FMT

Selangor expects to save RM2 billion in the takeover of water firms, now that the Federal Government has decided to invoke Section 114 of the Water Service Industry Act (WSIA).

Menteri Besar Abdul Khalid Ibrahim told a press conference today he was happy that Putrajaya had agreed to agreed to facilitate the restructuring of the water industry by invoking the act.

“The concessionaires are now subjected to Section 114 WSIA and this will have a positive impact on the state government and the people of Selangor as total payment to concessionaires is expected to be reduced by as much as RM 2 billion from the previous RM9.65 billion,” Khalid said.

“Now we only need to pay RM7.65 billion.”

Only the state-owned Konsortium ABBAS has accepted the compensation package offered by the Shah Alam administration. The other three concessionaires in the state—Puncak Niaga (PNSB), Syarikat Bekalan Air Selangor (Syabas) and Syarikat Pengeluar Air Selangor (Splash)–have declined.

Khalid said the new offer would cover only the value of the concessionaires’ assets. The original offer included consideration of their equities.

Asked whether he thought minority shareholders would be unhappy, Khalid said the majority shareholders must take the blame because they had put their own interests first.

He said the RM2 billion saved would be used to improve the quality of water services to users in Selangor, Kuala Lumpur and Putrajaya, who number more than seven million.

“Our main effort is to reduce non-revenue water by replacing existing pipes with fibre optic options and setting up ground penetrating radar to detect leaks in the underground distribution system,” he added.