In a letter to the Ministry of Energy, Green Technology and Water, the Selangor state government gave notice last week that it will take over the state’s water services industry on February 13.
Specifically, it intends to take over the four water concession companies: Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Sdn Bhd (PNSB), Syarikat Pengeluaran Air Sungai Selangor Sdn Bhd (Splash) and Consortium ABASS.
The government also pledges to ensure adequate water distribution to the 7 million people living in Selangor, Kuala Lumpur and Putrajaya.
The offer is not new; the state government has made multiple takeover offers over the past four years, all of which were rejected. The last offer, made in 2011, failed due to price disagreements.
But Selangor Mentri Besar (Chief Minister) Tan Sri Abdul Khalid Ibrahim says that this time, if there is any price difference between the offer and the price sought by the concessionaires, “international arbitration” will be sought.
Khalid was emphatic about the critical shareholder role of the federal government in takeover discussions: “Operations takeover of a company does not mean the company is being taken over, but it involves the shareholders…. And who are the major shareholders? The federal government.”
However, in a news conference in Putrajaya on January 31, Minister of Energy, Green Technology and Water Datuk Peter Chin Fah Sui said the federal government has no power to obligate water concessionaires to sell their equity to the state government.
He said that any offer would have to achieve agreement between buyer and seller, so “if there is an agreement, just let SPAN (Malaysia’s water regulator) and myself know.”
He blamed cheap water for Selangor’s frequent and widespread water supply cuts, saying it was vital to restructure energy and water tariffs so supply of both would not be further disrupted.
“Water that is given cheaply has only caused wastage because people do not appreciate and use it too much,” Chin said.
The Barisan Nasional Party-led federal government’s latest response to Selangor’s water woes has been to inject $37.9 million USD into Syabas, as announced on February 2. This is in addition to the $191.5 million USD previously given to resolve the water issue.
Prime Minister Datuk Seri Najib Tun Razak said he believed that the injection of funds would help, and he has vowed to solve the water problem if Barisan Nasional wins back the State of Selangor in the upcoming general election.