New RM14.9b SPV for Selangor water restructuring, says Khalid

Tan Sri Khalid Ibrahim says Selangor will infuse a new special purpose vehicle with RM14.92 billion in assets to manage the water restructuring exercise now finalised with Putrajaya. — file pic
Tan Sri Khalid Ibrahim says Selangor will infuse a new special purpose vehicle with RM14.92 billion in assets to manage the water restructuring exercise now finalised with Putrajaya. — file pic

KUALA LUMPUR, Sept 15 — Selangor will infuse a new special purpose vehicle with RM14.92 billion in assets to manage the water restructuring exercise now finalised with Putrajaya, Tan Sri Khalid Ibrahim said today.

Revealing details of the main agreement between the state and federal governments, the outgoing mentri besar said the asset injection will go to a new entity, Pengurusan Air Selangor Sdn Bhd (Air Selangor), which will come into operation after the state concludes the takeover of assets and liabilities currently held by water concessionaires operating in Selangor.

The federal government will also provide RM2 billion to help offset the state’s cost of taking over the four concessionaires — Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Sdn Bhd (Puncak Niaga), Konsortium Abbas Sdn Bhd (Abbas) and Syarikat Pengeluar Air Selangor Sdn Bhd (Splash).

Of the four concessionaires, Syabas, Puncak Niaga and Abbas have agreed in principle to Selangor’s combined offer of RM7.817 billion, while the Splash acquisition will be negotiated separately.

“The takeover will be settled separately but it will not get in the way of the state government’s efforts to take over Selangor’s water industry through a new entity, Pengurusan Air Selangor Sdn Bhd,” Khalid said in a statement.

The state government had initially made a combined offer of RM9.651 billion to take over assets and liabilities of the four concessionaires.

Splash rejected the offer outright, however, prompting threats by the state to push for the enforcement of Section 114 of the Water Services Industry Act 2006 (Wasia), which allows Putrajaya to forcibly acquire a concessionaire.

Separately, the assets and liabilities of the three concessionaires that have agreed to the terms will be transferred to Perbadanan Aset Air Berhad (PAAB) on a 45-year lease, covering all liabilities such as water debts and bonds valued at RM6.1 billion, and water assets owned by the concessionaires.

The facilities and service licences will be issued to Air Selangor by the National Water Services Commission (Span), along with the Langat 2 water treatment plant which will be leased to and managed by Air Selangor.

Khalid added that any future increase in water tariff will be done at a “reasonable rate” and will be vetted by Span and only with the agreement of the state government.

“The main agreement will be made public, subject to the Selangor State Enactment on Freedom of Information with Federal cooperation,” he said.

The mentri besar explained that once the takeover is completed, the state will focus on reducing non-revenue water, and improving the efficiency and effectiveness of water assets in dealing with the existing water shortage while waiting for Langat 2 to commence full operations.

The state will at the same time continue with ongoing efforts to upgrade Selangor’s raw water supply under its HORAS 600 and HORAS 3000 programmes.

“As announced previously, part of Air Selangor’s shares will be offered to the public after the restructuring is completed and after the company shows a good profit record,” Khalid said.

On Friday, Khalid finalised the water restructuring agreement with Putrajaya despite calls for the deal to be delayed owing to his resignation as mentri besar.

The water restructuring plan and the Langat 2 project were among several reasons given by PKR in deciding to replace Khalid with its president Datuk Seri Dr Wan Azizah Wan Ismail.

He later resigned from his post as mentri besar, but remains as a caretaker until his replacement is selected.

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