KARAK, May 22 — Putrajaya will not rush to use the Water Services Industry Act (Wasia) 2006 to forcibly acquire Syarikat Air Selangor Sdn Bhd (Splash), Datuk Seri Dr Maximus J. Ongkili said today, amid continued pressure from the Selangor state government to buyout the water utilities firm in the state's water restructuring exercise.

The Energy, Water and Green Technology Minister said it is entirely up to him to decide whether or not to use Section 114 of the Act, which would compel a water firm to sell its stake to the federal government.

"The approval from Cabinet is still in my pocket, and I have been advised to use it only when necessary," he said at a press conference after a site visit to the Pahang Selangor Raw Water pipeline here.

Yesterday, Selangor Mentri Besar Tan Sri Khalid Ibrahim warned that Putrajaya will forcibly take over Splash if it continues to refuse the state's buyout offer.

Splash is the only water utility firm in Selangor that has refused the deal. Three other firms - Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Sdn Bhd (PNSB) and Konsortium Abbas Sdn Bhd (ABBAS) — have so far agreed to the state government’s takeover plan.

Maximus said today that the current standoff between Selangor and Splash's management is over the valuation of the assets in the takeover.

He said Putrajaya will continue to mediate between the two parties, and is hopeful of an amicable solution.

"I am confident Selangor will be reasonable, so long as Splash is also reasonable," he said.

The Selangor state government will spend RM2.47 billion to buyout PNSB, RM3.11 billion for Syabas and RM900 milion for ABBAS.

A memorandum of understanding signed between Selangor and Putrajaya in February stated that the state would take over the four water concessionaires operating in the state — Syabas, PNSB, ABBAS and Splash.

Only state-owned ABBAS accepted the offer by the time it expired on March 21.

Splash rejected the offer outright, while PNSB and its subsidiary, Syabas, said they were willing to “consider” the state’s offer on several conditions.

The companies had wanted higher payouts, stipulating a 15 per cent return on equity instead of the 12 per cent offered. They also want full compensation for not raising water rates.

Maximus, meanwhile, said the cabinet is currently studying a proposal by the Federal Territories Ministry to take control of water assets in Kuala Lumpur and Putrajaya, after the lengthy water rationing earlier this year.

He said the plan is to set up at least 50 per cent of water supply to be based on land owned by the Federal Territories, but stressed that it would be easier said than done since it is surrounded by Selangor.

"The challenge is where the water is going to come from," he said.

Late last month, Federal Territories Minister Datuk Seri Tengku Adnan Mansor said he wants ful control of the water distribution network in Kuala Lumpur and Putrajaya, including sourcing for raw water.

He said both cities already have existing reservoirs, and proposed that raw water be sourced from either neighbouring Negri Sembilan or Pahang.