Good news to puncak...
Selangor offers RM9.65b for state waterworks buyout
By Mohd Farhan Darwis February 20, 2013
SHAH ALAM, Feb 20 ― The Selangor government has made a RM9.65 billion offer to take over all four water concessionaires in the state, promising at least double in annual equity returns to the firms and a complete buyout of liabilities.
Mentri Besar Tan Sri Khalid Ibrahim told a press conference here that the offer would finally call an end to the state’s water woes without causing any losses to the concessionaires or imposing higher tariffs on consumers.
“This amount represents a return of 12 per cent a year on equity as compared to the average returns for the water industry which stands at 6 per cent.
“In addition, all liabilities will also be taken over through a special purpose vehicle (SPV),” the Bandar Tun Razak MP said.
The offer, made today by state investment arm Kumpulan Darul Ehsan Berhad (KDEB), also comes attached with a 14-day deadline to the four companies: Syarikat Bekalan Air Selangor (SYABAS), Puncak Niaga Sdn Bhd, Konsortium Abass Sdn Bhd, and Syarikat Pengeluar Air Selangor Holding (SPLASH).
Khalid (picture) said Selangor’s waterworks buyout was part of the state’s efforts to restructure water services and return the right to the crucial commodity to Selangor residents.
He said in a statement here that the rights to managing the water industry must be in the hands of a government that was democratically elected to power by the people.
Following the takeover, Khalid promised that Selangor’s initiative of giving 20 cubic metres of free water to Selangor residents would continue, while water tariffs would remain just and not burdensome.
“The state government... hopes that all involved, including (Puncak Niaga chairman) Tan Sri Rozali Ismail, would not prejudice this effort,” Khalid said.
When asked for the state’s plans should the federal government, which holds one “golden share” in SYABAS through the Ministry of Finance Inc, reject its buyout offer, the mentri besar said the state would then use the Water Services Industry Act 2006 (Act 655).
“We will use Act 655 if they reject... but now, let’s just focus on this offer. If they reject it, it means they are rejected the request of Selangor folk,” he said.