Frequently Asked Questions on Water Restructuring Process

Frequently Asked Questions on the Restructuring Exercise of Water Industry in Selangor

1.       What are the Selangor State Government’s intentions in the restructuring of the water industry in Selangor?

·         The Selangor State Government intends to restructure the water services industry in Selangor in a holistic manner, ensuring that the four concession companies are consolidated into one entity, which would eventually hold the operating license to manage the water treatment and water distribution in the state of Selangor.

·         This single operator would be a company under the Selangor State Government.

·         The Selangor State Governments intends to increase efficiency of the water industry, reduce tariffs by up to 24% in the long run, and to maintain the free water for the first 20m3 policy.

 

2.       How does this fit into the Federal Government’s plans?

·         The Water Services Industry Act (WSIA) 2006 was passed in Parliament with the intention of renationalizing all water assets in the country.

·         The plan is to eventually have all water-related assets transferred back to the Federal Government through its nominated agency Pengurusan Aset Air Berhad (PAAB).

·         The Selangor State Government owns 70% of the State’s water assets, whilst the remaining 30% belongs to privatized concession companies.

·         If successful, all Selangor water assets will be owned by the Federal Government, but license to operate given to another entity.

 

3.       What is the Selangor State Government’s proposal for a holistic restructuring of the water industry?

·         The Selangor State Government is proposing that it would take over the assets of the concession companies, and also pay them their invested equity at a rate of 12% return on investment. This amounts to RM5.7 billion (RM4.6 billion worth of assets and RM1.1 billion worth of equity)

·         After this, the Selangor Government would transfer RM4.6 billion worth of assets from the concession companies and RM9.7 billion worth of its own State water assets to PAAB.

·         The Selangor Government would then receive RM14.3 billion in cash and bonds from the Federal Government from the sale of water-related assets.

·         A special-purpose vehicle would be set up as a corporate entity to consolidate all the four companies together. The State Government owns shares  in some of the companies and hence by virtue of these shares would be able to exercise significant decision-making in the consolidation.

·         The special-purpose vehicle would apply for an operating license for the water industry in Selangor, leasing the water assets now owned by PAAB to operate at the State level.

 

4.       Why is it important for the restructuring to take place as quickly as possible?

·         It is important to expedite the process of restructuring because under the concession agreement, Syabas can increase water tariffs by up to 37%.

·         Even if the Federal Government, after giving the operating license back to Syabas (which the Selangor State opposes), decides not to increase the tariffs, the difference will be borne by the State Government and in turn by the people of Selangor.

 

5.       What did the Federal Government do to sabotage the Selangor State Government’s plans?

·         Two days before the Selangor State Government’s offer to the concession companies expired, the Federal Government through its regulatory body Suruhanjaya Pengurusan Air Negara (SPAN) announced that it would bypass the State Government to negotiate directly with concession companies.

·         Their offers to the concession companies would obviously be a sabotage since they would offer higher prices to the companies, than what the State was offering.

·         The Federal Government’s excuse was that the State Government was intentionally delaying the process of negotiation, when in fact the State Government has always provided the Federal Government information every step of the way.

·         All four concession companies rejected the offer made by the Selangor State Government, as expected.

 

6.       Why is the Federal Government’s offer to the concession companies considered a bailout of its Barisan Nasional cronies?

·         The Federal Government, in paying a hefty amount of money to the concession companies beyond what is reasonable, is effectively bailing out the concession companies from the great debts that they are facing presently.

·         After the WSIA 2006 was signed, accounts show that the concession companies made out huge dividends to their shareholders. These large dividends are unacceptable, since the companies are already in debt.

·         The CEO of Puncak Niaga was paid RM5.1 billion in 2007, and monthly management fee of RM700,000. If the company is in debt, why pay such a high salary to its CEO?

·         The Federal Government continues to support its Barisan Nasional crony companies. Syabas sponsors the UMNO General Assembly annually, including in 2009.

 

7.       Why must the Selangor State Government be included in the process of restructuring of the water industry?

·         Clause 191(4) and Clause 191(7) of the Water Services Industry Act (WSIA) require that the State Government must be involved in the process of negotiation, as it is a counterparty to the concession agreement signed with the concession companies.

·         In a Cabinet decision dated 16th January 2008, it was agreed that the State Government, through its State subsidiary company, Kumpulan Darul Ehsan Berhad (KDEB), would take the lead in negotiating on the restructuring process of the water industry.

·         This Cabinet decision has not been revoked, nor any other Cabinet decision made reversing it. Hence, the State still has to be included. Total exclusion is tantamount to being illegal.

·         The Selangor State Government by law still has full rights over the State’s raw water. Excluding the State Government is not a wise or practical idea, as it would need to be involved in the eventual outcome of the water industry.

·         More than 70% of the state’s water assets are still owned by the Selangor State Government, including those that are being managed by the concession companies now.

·         Under the concession agreements, all water-related assets are to be transferred back to the Selangor State Government. If the companies transfer these back to the Federal Government, it would renege on the agreement to have the assets transferred back to the State Government.

 

8.       What is the Selangor State Government asking of the Federal Government?

·         The Selangor State Government demands for the Federal Government to terminate the concession agreement with Syabas, based on its mismanagement, corrupt practices, breach of contract and inefficient delivery of services to the people of Selangor, Kuala Lumpur and Putrajaya.

·         The Selangor State Government demands that the Federal Government to exercise its powers under the WSIA to do so.

·         The Selangor State Government is demanding that it continues to take the lead in the negotiations of water restructuring with concession companies, according to the earlier Cabinet decision and along with the spirit of the WSIA.

·         The Selangor State Government is demanding that the operating license is not given back to Syabas but to give it to the State Government.

·         The Selangor State Government demands for reasonable action to be taken by the Federal Government. If both Governments were to co-operate, this outstanding issue will be resolved more quickly without it becoming a political issue.

 

9.       What options are available for the Selangor State Government, if the situation reaches a stalemate?

  • The Selangor Government has met with the Ministry of Energy, Water and Communications and the situation seems to have met with a stalemate.
  • The Selangor State Government has submitted its proposal for the Minister to consider carefully, in the holistic restructuring of the state’s water industry and awaits its feedback.
  • If all else fails, the Selangor State Government will have no choice but to take legal action against the Federal Government. 

March 31, 2009 · Filed Under Nota

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BRIEFING ON THE WATER RESTRUCTURING EXERCISE IN SELANGOR

jata_selangor
SEKRETARIAT AKHBAR,
PEJABAT MENTERI BESAR SELANGOR,

PRESS STATEMENT
3 MARCH 2009

SHAH ALAM – The Pakatan Rakyat Selangor State Government held a “Water Restructuring Briefing” to all the Yang Di-Pertua of local councils and local councilors today. This briefing was given by members of Selangor’s Water Review Panel and a presentation was given by YB Dr. Dzulkifli Ahmad, Kuala Selangor Member of Parliament. The briefing successfully clarified the situation of the water restructuring exercise, including its background, current status and the main points and issues including what the Selangor State Government intends to ultimately achieve. This is in line with the Selangor State Government’s policy of consistently providing full and complete information to its rakyat under the principles of good governance.

The attendees at the briefing were also informed of the agreement that the Federal Government would allow the Selangor State Government to lead the water industry restructuring exercise in 2008. As a result, the Selangor State Government appointed this Water Review Panel to conduct detailed analyses and lead the restructuring exercise in Selangor.

The offer price to take over concession companies’ assets (RM4.6b) and their equity (RM1.1b) by the Selangor State Government is at a fair and reasonable rate that would benefit all quarters and one that would especially not come at the rakyat’s expense. This offer, however, is considered by some as insufficient as it would not profit the pockets of greedy. The Federal Government then intercepted and announced on 18th

February 2009 that they would take over the restructuring exercise from the State Government and negotiate directly with the concession companies. The State Government’s offer was then rejected by the companies on 20th February 2009.

This sabotage by the Federal Government seems to infringe on the rights of the StateGovernment and to profit certain individuals. This is also an attempt to curtail the State Government’s intention of maintaining a low water tariff rate to ease the burdens of those living in Selangor and Kuala Lumpur.

The Selangor State Government practices the concept of “Merakyatkan Ekonomi Selangor” and places high importance on its people reflected through its maintaining its policy of free water for the first 20m3, and intention of reducing water tariffs by 10%.

This Federal Government “bail-out” would be an admission of failure of the privatisation policy of the Barisan Nasional Federal Government, whose credibility is severely under question. For too long has the BN Government ruled without considering the welfare of its rakyat.

PRESS SECRETARIAT
OFFICE OF DATO’MENTERI BESAR SELANGOR

March 31, 2009 · Filed Under Kenyataan Media

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STATE GOVERNMENT IS PREPARED TO TAKE OVER SELANGOR WATER CONCESSIONAIRE’S ASSETS

jata_selangor
SEKRETARIAT AKHBAR,
PEJABAT MENTERI BESAR SELANGOR,

PRESS STATEMENT
11 FEB 2009

SHAH ALAM – The Selangor State Government is serious in ensuring that the restructuring of the water services industry in Selangor is implemented effectively, to provide maximum benefit to the people.After six months of being engaged in the process of restructuring the water industry that has involved multiple parties, the State government is now ready to make an offer to take over the assets and equity owned by four water concession companies.

The State Executive Council has agreed today to release the offer letters within these two days to the four concessionaires, which are Konsortium ABASS Sdn Bhd (ABASS), Puncak Niaga (M) Sdn Bhd, Syarikat Pengeluar Air Selangor Holdings Berhad (SPLASH) and Syarikat Bekalan Air Selangor (SYABAS).

Before making this decision, the State Government, through its Water Review Panel that was established to review the restructuring process of the water industry in Selangor, has conducted a detailed study into the valuation and calculation of all companies’ assets and equity. It must be stressed that public interest was of primary importance when making this decision.

The State Government’s offer to all concession companies is one that is fair, taking into account the considerations of all stakeholders and will not negatively impact any of them. The rate of return and profit that will be earned by the companies is considered as fair.

It is the hope of the State Government that all parties will agree with this offer, in order that the restructuring process of the water services industry in Selangor is implemented before 31st of March, at the request of the Ministry of Energy, Water and Communications. The co-operation of all would avoid any increase in water tariffs, which if implemented would burden the rakyat especially during an impending economic slowdown.

The State Government is aware that the restructuring of the water industry in Selangor affects its residents and feels that the rakyat has a right to understand the issues involved. To that end, the Selangor Menteri Besar’s Office will hold a Public Briefing on a date to be soon announced. The Briefing is to provide updates and information on the situation to all stakeholders in the state, especially since the issue is one that needs complex analysis and explanation.

The public will then receive background explanations on the restructuring process of the water industry in Selangor, with relevant information, and the direction the State Government is headed in the entire process. The Briefing is expected to be attended by industries affected by the water industry, policy makers at state and national level, civil society, non-governmental organizations, academicians, the private sector and most importantly, members of the public.

PRESS SECRETARY
PEJABAT DATO’ MENTERI BESAR SELANGOR

March 31, 2009 · Filed Under Kenyataan Media

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Presentation - Selangor Water Review

Taklimat
Download here

March 30, 2009 · Filed Under Presentation

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Leafleat

 

今天就阻止中央政府拯救朋党公司！

为了人民的利益支持雪兰莪州政府接管特许经营水务公司

 

目前经济正步入衰退期，如果再调涨水费，人民生活将百上加斤。中央政府打算以非常高的价格收购水务公司的资产，其后果将导致水费高涨。

 

如果我们容许这类事件发生，一旦雪兰莪州开了先例，国阵中央政府将在全国实施这措施。

 

这些特许经营水务公司非常贪婪，他们指雪兰莪州政府的献购价格太低。另一方面，他们却已提走了数以百万令吉计的款项。有鉴于此，您们不要让他们再次把属于您的钱，存在他们的户头。

 

3个中央政府不应收购的理由

 

1.您将必须付更高的水费

·         首20立方米免费水的政策将被取消

·         水费将被调高31%

·         如果改为雪州政府接管，水费将调低：

a. 目前收费率是1.33令吉/立方米

b. 2009年将下调10%至1.33令吉/立方米

c. 2011年将下调20%至1.18令吉/立方米

d. 2013年将下调25%至1.11令吉/立方米

·         在SYABAS经营下，您继续得到的是低品质的食水

 

2.这是走后门的拯救计划

·         国阵政府拯救债务缠身的朋党公司

a.Puncak Niaga的债务    13亿令吉

b.Syabas的债务          29亿令吉  

c.Splash的债务          16亿令吉

d.Abbas的债务           6千400万令吉

总共                64亿令吉

·         中央政府将以“天价”收购特许经营水务公司的资产。

·         群众的款项将用来付给己经是腰缠万贯的人

·         贪污受贿情况继续发生

 

3. 拥有不良记录的Syabas将成为唯一的水供公司

·         水质继续恶化，发出异臭与污秽气味

·         投诉没有获得及时关注或处理

·         72%或总值6亿令吉工程没有经过公开招标

·         您得付出50令吉重新驳接水供，私营化之前只是10令吉

·         在2005、2006及2007年的Syabas总结合约中，账目审计出现3亿2千500万令吉的落差

·         从2005至2007年，Syabas的工程总值超过最高顶额2亿令吉

·         Syabas将垄断雪兰莪及吉隆坡的食水供应

·         中央政府将垄断经营权给予Syabas

·         虽然雪州水供管理局（JKSA）在2005年，只批给2千320万令吉做为装修费，但最后Syabas却用了5千120万令吉做为上述用途

·         根据合约,syabas在2012年可以调高25%水费、2015年再调高20%，2019年10%。 接着2021、2024、2027及2030年则是调高5%

·         Punck Niaga拥有Syabas的70%股权，Puncak Niaga在2007年支付5百10万令吉（平均每月42万5千令吉）予执行主席，他是马来西亚其中一位领取最高董事费的人

·         他也是Syabas的执行主席

·         输水管丑闻

                        a.从印尼入口总值3亿2千万令吉输水管

b.该公司也是属于上述同一人

·         Syabas在2005年获得总数20亿900万令吉的贷款和补助金，以进行私营化计划

·         Syabas垄断雪兰莪及吉隆坡的水供分配

·         虽然Syabas拥有不良记录，但中央政府将继续发给垄断经营执照给Syabas

 

 

2006年水供服务法令(WSIA) 第191(4) 及91(7)节条文阐明，如果在没有雪兰莪州政府的参与下，中央政府直接与特许经营水务公司洽谈是违法的。

                                                         

根据2006年水供服务法令，能源、水务及通讯部部长有权力终止有关特许合约。不过，有关方面已拒绝执行该法令赋予的权力。

 

 

 

水是全人类享有的最基本人权，因此不应被视为牟利的产品。身为政府有责任实践及履行这项权益

 

通过付给特许经营公司“天价”，中央政府的做法是“私营赚利，公众亏损”

 

 

 

 

为捍卫雪兰莪与吉隆坡人民的权益

不要让国阵政府私营化政策得逞造成人民深受其害

 

 

您可以做些什么？

 

 

1.    与地方议会或居民协会合作，在社区召集座谈会讨论。

2.    发手机短信给朋友们，反对中央政府拯救Syabas。

3.    将反对中央政府拯救相关特许经营公司的信函，传真至能源、水务及通讯部。传真号码为03-8889 3712

4.    将您的意见传真到平面或电子媒体。

5.      将这项课题写在网志（部落格）上，并将意见发送给其他部落格。

March 30, 2009 · Filed Under Nota

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KEPUTUSAN SPAN MENAFIKAN HAK KERAJAAN NEGERI SELANGOR DALAM PELAKSANAAN PENSTRUKTURAN SEMULA INDUSTRI AIR SANGAT DIKESALI

19 FEB 2009: KUALA LUMPUR:  Kerajaan Selangor kecewa terhadap keputusan Ketua Pegawai Eksekutif (Ceo) Suruhanjaya Air Negara (SPAN) Dato’ Teo Yen Hua untuk berunding terus dengan empat syarikat konsesi  dalam usaha pengambilalihan aset  perawatan dan pengagihan air sebagai sebahagian pelaksanaan penstrukturan  semula di Selangor.
Tindakan tersebut dilihat tidak konsisten dengan keputusan Kerajaan Pusat pada 16 Januari 2008, yang membenarkan Kerajaan Negeri, menerusi Kumpulan Darul Ehsan Berhad (KDEB), untuk mengambil alih operasi dan penyenggeraan aset air  daripada konsesi-konsesi air di Selangor, secara bersama.
Tindakan itu akhirnya  boleh menyebabkan berlakunya penjualan dan pencagaran semula aset perawatan dan pengagihan air daripada Pengurusan Aset Air Berhad (PAAB).  Sebagai tindakan kepada keputusan tersebut, Kerajaan Negeri sebenarnya sedang melakukan usaha-usaha tertentu bagi memastikan bahawa pelaksanaan penstrukturan semula dalam disempurnakan bagi manfaat rakyat Selangor dan Kuala Lumpur.
Keputusan SPAN itu nyata meremehkan Perlembagaan Persekutuan dan hubungan Kerajaan Pusat dengan Kerajaan Negeri. Sehubungan ini, Kerajaan Selangor mempersoalkan keputusan yang dibuat oleh SPAN itu yang sepatutnya terletak dalam bidang kuasa Kementerian Tenaga, Ar dan Komunikasi (KTAK).  Kami percaya tindakan SPAN itu juga tidak konsisten dengan semangat yang terkandung dalam Akta Perkhidmatan Industri Air (WSIA) tahun 2006.l
Keputusan SPAN juga tidak konsisten dengan peruntukan seksyen 191(4) WSIA tahun 2006 yang mengkehendaki supaya syarikat-syarikat konsesi mengadakan rundingan dengan Kerajaan Pusat dan Kerajaan Negeri dalam kapasitinya sebagai pihak pengantara dalam perjanjian-perjanjian konsesi dan perjanjian tambahan.
Di samping membantu inisiatif Kerajaan Negeri untuk membeli semua konsesi air ini bagi kepentingan rakyat menerusi tawaran kami yang berpatutan, nampaknya pihak Dato’ Teo lebih mengutamakan kepentingan konsesi-konsesi persendirian. Oleh itu kami mendesak agar beliau menyatakan pendiriannya dalam hal ini. Jika berlaku penyelewengan, maka pihak kami mencadangkan supaya beliau meletak jawatan.
Kerajaan Negeri percaya keputusan SPAN yang diragui itu boleh mendatangkan implikasi negatif yang mendalam di pihak rakyat Malaysia yang menetap di Selangor dan Kuala Lumpur.  Maka kerajaan Negeri Selangor memberi jaminan untuk meneruskan usaha bagi melindungi kepentingan orang ramai melalui semua cara, dan memastikan rakyat Selangor dan rakyat Kuala Lumpur menikmati air bersih dengan harga yang rendah. 

TAN SRI DATO’ ABDUL KHALID IBRAHIM
DATO’ MENTERI BESAR SELANGOR

March 30, 2009 · Filed Under Nota

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Joint Media Statement by Member of Parliaments in the Selangor Water Review Panel

Joint Media Statement by Member of Parliaments in the Selangor Water Review Panel in Kuala Lumpur on Monday, 23rd February 2009:

Federal Government Sabotaged Offer by Selangor Government to Acquire Water Assets and Concession in the State

The Selangor state government made an offer to 4 privatised water service providers – Puncak Niaga Sdn Bhd (PNSB), SYABAS, SPLASH and ABASS to acquire their water assets and concessions on the 13th February 2009. 

The combined RM5.71 billion offered was made with the objective to deliver the lowest possible water tarriffs for the residents of Selangor and Kuala Lumpur.  At the same time, the offer was consistent with, and guided by the terms and conditions specified in the concession agreements signed willingly by all parties involved.  It was a comprehensive offer because it encompasses the audited asset value of all water-related assets as well as a  very fair and reasonable return to the capital invested by the respective concessionaires.

However, before the concessionaires are able to respond to the state government’s offer by the 20th February, we are shocked that the Ministry of Energy, Water and Communications, via Dato Teo Yen Hua, CEO of National Water Services Commission (SPAN) announced on the 18th February that the Federal Government will proceed to negotiate directly with the water concessionaires.

Instead of supporting the state’s offer, SPAN intentionally threw a spanner in the works to sabotage the Selangor state’s attempt at delivering the lowest possible water tarriffs to her people.

For with an alternative competing offer which will not only encompass higher cash valuation but also more lucrative terms and conditions from the Federal Government, SPAN has single-handedly destroyed any likelihood of a positive response from the concessionaires to the state government.

Therefore with SPAN’s interference, it was not surprising that the concessionaires rejected the state government’s offer on 20th February, last Friday.  We will like to call upon the Minister to explain the actions of his Ministry for sabotaging the efforts of the Selangor State Government.

We will like to reiterate our position that if the offer from the Federal Government to acquire these assets and concessions at the same or lower price than what the Selangor state government has offered, we will not only agree to letting the Federal Government lead the negotiations, but also provide the Ministry with our full support and co-operation.

If however, the Ministry offers the concessionaires a much higher cash value for its assets as well as lucrative license terms for them to continue as the water operators in the state, the Minister must explain why he is forsaking the rights and interest of 7.3 million population of Selangor and Kuala Lumpur.

We will also like to emphasize to the Minister that under the law, particularly the Water Services Industry Act 2006, as well as the terms of the current concession contracts, the Selangor state is a counter-party to all previous and future agreements.  Hence the attempt by the Federal Government to unilaterally negotiate with the concessionaires is illegal and will be subjected to future dispute and complications.

Therefore, we call upon the Federal Government to respect the rights of the State and let the Selangor Government proceed with the negotiations with the concessionaires in the interest of the people of Selangor and Kuala Lumpur.

 

Tony Pua, MP Petaling Jaya Utara
Charles Santiago, MP Klang
William Leong, MP Selayang
Dr Dzulkifli Ahmad, MP Kuala Selangor

March 30, 2009 · Filed Under Kenyataan Media

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Media Statement - Selangor Water Concession

We, the people of Selangor, call on the Minister of Energy, Water and Communications (KTAK) to place public interest as the highest priority in the restructuring of the State’s water industry.

The Minister should not allow the concession companies to rape the people of Selangor and Kuala Lumpur twice. By

Section 191(5) of the Water Services Industry Act (Act 655) or WSIA states that

“The determination of what amounts to national interest issues arising from the coming into operation of this Act shall be made by the Minister and such determination shall be final and binding upon all persons and shall not be challenged, appealed against, reviewed, quashed or questioned in any court.”

It is clear that the Minister of Energy, Water and Communications has the power to determine what amounts to national interest in order to ensure the implementation of the restructuring process, which includes the possibility of termination of concession agreements.

Joint Media Statement by Member of Parliaments in the Selangor Water Review Panel in Kuala Lumpur on Tuesday, 17th February 2009:

Call Upon the Minister of Energy, Water & Communications to support and endorse the Selangor Government’s Offer to Acquire the water assets and concession in the state

The water privatisation exercises in Selangor was started in the early 2000s by the Mahathir administration, where hugely lucrative concessions were granted to politically-linked private companies with neither the skills or experience in the water industry, nor the necessary equity funds to operate these businesses. As a result, the residents of Selangor and Kuala Lumpur were forced to pay high prices for the water supply, unreasonable penalties as well as often poor service quality.

In view of the clear unsustainability and failure of the privatisation exercise, where some of these concessionaires are facing serious concerns in repaying its bonds and water tariffs are scheduled to increase beyond tolerable range, the Federal Government has embarked on an exercise to nationalise the water-related assets nationwide under the new Water Industry Services Act (WISA) enacted in 2006.

The people has suffered once already when the assets were forcibly piratised by the Government. We will like to call upon the Minister not to rape the country twice by buying back these water assets and concessions at inflated prices. Do so will only provide the basis to the dictum that the Barisan Nasional government privatises profits and nationalises losses.

The Selangor members of parliament who sits in the Selangor Water Review Panel call upon the Minister, who is granted wide-ranging powers under WISA, to not only support, but help execute Selangor’s fair and reasonable offer to acquire the water assets and concessions in the state. The offers to the concessionaires were made last week on Friday, 13th February.

The offer made by the Selangor Government was made on the basis of one-time book value of the water-related assets in the concessionaires as at 31st December 2007, and a fair and reasonable return to the actual equity invested by the concessionaires since the industry was first privatised. It should be noted that the offer made by the Selangor state government is guided by and in compliance with the terms and conditions willing signed by all parties in the concession agreement. Therefore contrary to press reports in the last few days, the acquisition offer is neither a cynical offer which is too low, or without basis.

It should be noted that all investment analysts have been using the “discounted cashflow model” which results in significantly higher valuation for these concessions. However, the “discounted cashflow model” is just a technical term for paying the concessionaires its future profits, which in itself is a totally unreasonable proposition, and defeats the purpose of the Governments’ water restructuring exercise.

If we were to acquire McDonald’s today, it will be fair to put a value to its future profits as it’s a wholly private enterprise. However, we are acquiring government concessions in this case – which means that the Government should not be paying for future profits for licenses and rights which it has itself granted!

The Minister is granted wide-ranging powers under the WISA (2006) Clause 191(5) where:

The determination of what amounts to national interest issues arising from the coming into operation of this Act shall be made by the Minister and such determination shall be final and binding upon all persons and shall not be challenged, appealed against, reviewed, quashed or questioned in any court.

Therefore with the powers vested in the Minister, Dato’ Shaziman Abu Mansor, a newly minted Minister since the last elections, we call upon the Minister to do the right thing and act to ensure that the rights and welfare of Selangor people and that of all Malaysians.

Tony Pua, MP Petaling Jaya Utara
Charles Santiago, MP Klang
William Leong, MP Selayang
Dr Dzulkifli Ahmad, MP Kuala Selangor

March 30, 2009 · Filed Under Kenyataan Media

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Public Briefing by the Water Review Panel, Selangor State Government

Public Briefing by the Water Review Panel, Selangor State Government
11am, Wednesday 18th February 2009
Auditorium Dewan Jubli, SUK Selangor, Shah Alam

Background Note

Introduction

As part of a national restructuring exercise, the Selangor State Government intends to take over the assets and equity of the four concession companies in the water industry. Primary reasons for doing so include the need to ensure more efficient and better control of the water industry in the state, better distribution of water, and to ensure the water tariffs are kept at a low rate. Public interest lies at the heart of this exercise.

Syabas had in early 2008 written expressly to request for a tariff increase by January 2009, then extended to March 31st 2009. In December 2008, the Minister of Energy, Water and Communications Datuk Shaziman Abu Mansor stated that according to the concession agreement the water tariff in Putrajaya, Selangor and Kuala Lumpur would be increased by up to 37% in January 2009. This has been deferred to March 31st to allow the restructuring of the water industry in Selangor. Under the agreement, more water tariff hikes would take place till 2035, a hike of 25% in 2015, 10% in 2019, and 5% in 2021, 2024, 2027 and 2030.

This exercise is essentially conducted in line with the Federal Government’s intention to consolidate the water industry. From the State’s perspective, aside from consolidation of the whole water industry in Selangor in one holistic exercise, to reduce wastage and the multiple players, another essential objective is to ensure that the tariff hike is avoided especially in these times of economic stress.

Present Status of the Selangor Water Industry

In the past, the water industry was centralized with the State Government department, from management of raw water, to water treatment and distribution. This changed over the years, first when the water distribution came under the corporatised body Perbadanan Urus Air Selangor Berhad (PUAS) under the Jabatan Bekalan Air (JBA), and later in conjunction with the Malaysian government’s wave of privatization policy.

The water industry in Selangor is therefore currently fragmented, with many players involved. The state under Lembaga Urus Air Selangor (LUAS) owns full rights to raw water. The rights to water treatment, however, is split several ways, between the State, Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH), Konsortium ABASS Sdn Bhd (Abass) and Puncak Niaga (M) Sdn Bhd. Water distribution is fully privatized and managed by Syarikat Bekalan Air Selangor (Syabas). There are therefore four water concessionaires in Selangor.

The original philosophy of privatization was to ensure that industries are run more efficiently providing quality water and efficient distribution systems for the benefit of the public and also reducing the financial burden held by government. Although the provision of public utilities should always favour public interest, the above expected outcome of the water industry has not been achieved in Selangor to date.

    Concession Companies

  • Syarikat Bekalan Air Selangor (SYABAS)

    • Syabas is owned by Puncak Niaga (70% share) and the Selangor state investment arm Kumpulan Darul Ehsan Sdn Bhd (30% share). The concession was granted to Syabas under a 30-year agreement in 2005 to distribute water to users in Selangor, Kuala Lumpur and Putrajaya. It was incorporated on July 8, 1996 with the primary aim of taking over the responsibility of water distribution from Perbadanan Urus Air Selangor Berhad (PUAS), a corporatised body previously under the Jabatan Bekalan Air (JBA).

  • Puncak Niaga (M) Sdn Bhd

    • Puncak Niaga (M) Sdn Bhd is wholly owned by the public-listed Puncak Niaga Holdings Berhad, and it holds 5 water treatment concessions with the Selangor State Government to operate, manage, and maintain 29 water treatment plants in total. It owns 70% share of SYABAS, which has a concession to manage water distribution.

  • Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH)

    • SPLASH is a special purpose company formed under the privatization of the operation and maintenance (O&M) of the Sungai Selangor Phase 1 water treatment facilities and Sungai Selangor Phase 3 to build and operate water treatment facilities and its dam. This privatization agreement was signed in 2000 between SPLASH and the Selangor State Government. The shareholdings of SPLASH are as follows: 30% is owned by the Selangor government under Kumpulan Perangsang Selangor (KPS), 30% by The Sweetwater Alliances Sdn Bhd, and 40% by Gamuda Berhad.

  • Konsortium ABASS Sdn Bhd (Abass)

    • ABASS is a special purpose company established in 1999 to undertake the privatization works for the operations and maintenance of the Semenyih water treatment plant and its dam, thereafter signing an agreement to undertake, design, construct, complete, test and commission one of the package’s distribution works within the SSP3 project. Its shareholdings are as follows: 100% owned by Titisan Modal (M) Sdn Bhd, which is itself owned by state investment arm Kumpulan Perangsang Selangor (55%) and Operasi Murni Sdn Bhd (45%), a private company involved in general trading and investment holding.

Water Concession Agreements

The urgency to finalise the State’s takeover of the water industry in Selangor is exacerbated by the contents of the original water concession agreements, both in terms of the many unfair conditions of the agreements – as well as non-compliance of the agreements’ clauses.

The present State Government will not accept terms such as guaranteed profits regardless of performance and unfair terms of payments to concession companies. The present State Government also cannot agree with the scheduled tariff increases.

There is evidence to show that Syabas has breached key terms of the concession, including breaching of the ceiling for capex (capital expenditure) and operating expenditure (opex) works, the failure to implement open tenders and the non-inclusion of state representatives on Syabas’ board. More than 72% of contracts worth a total of RM600 million were awarded to selected companies via direct negotiations and only 25% via competitive open tender. There was also a discrepancy of more than RM525 million between the summary of contracts awarded in 2005, 2006 and 2007 and Syabas’ review document. In this regard, the Selangor State Government has written to the Ministry of Energy, Water and Communications to revoke Syabas’ 30-year water supply concession in 2005. No response has yet been received from the Ministry on this matter.

Power of the Minister in the Restructuring Exercise

Section 191(5) of the Water Services Industry Act (Act 655) or WSIA states that

“The determination of what amounts to national interest issues arising from the coming into operation of this Act shall be made by the Minister and such determination shall be final and binding upon all persons and shall not be challenged, appealed against, reviewed, quashed or questioned in any court.”

It is clear that the Minister of Energy, Water and Communications has the power to determine what amounts to national interest in order to ensure the implementation of the restructuring process, which includes the possibility of termination of concession agreements.
 
Selangor State Government’s Restructuring Plan

The Selangor State Government has made offers to the four concession companies Syabas, Puncak Niaga, Abbas and Splash based on a fair and reasonable value. They have all been given a deadline of 20th February 2009 to respond to the State’s offer.

The State will plan to eventually pass the water assets – as well as its own state assets – to PAAB, but maintain operations and maintenance on water treatment and distribution in Selangor. This is done in accordance with the national restructuring exercise of the water industry. If the transaction is done smoothly, this would be part of a holistic plan for the State to eventually operate and manage the water industry efficiently for the interest of the rakyat.

March 30, 2009 · Filed Under Taklimat

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Taklimat Media - Panel Penilai Air Kerajaan Negeri Selangor

TAKLIMAT MEDIA
Panel Penilai Air Kerajaan Negeri Selangor
10.30 Pagi, Khamis, 26 Februari 2009
SUK Selangor, Shah Alam
Pengenalan

Sebagai bahagian dalam pelaksanaan penstrukturan semula di peringkat kebangsaan, Kerajaan Negeri Selangor berhasrat untuk mengambil alih kesemua aset dan ekuiti daripada empat syarikat industri air di negeri ini. Alasan utama bagi melaksanakan tujuan tersebut melibatkan keinginan bagi memastikan pengurusan industri air dilaksanakan dengan lebih baik dan lebih cekap, pengagihan air yang lebih merata, dan bagi memastikan tarif air dikekalkan pada kadar rendah. Tegasnya, kepentingan rakyat lebih diutamakan dalam usaha pengambilalihan industri air ini nanti.

Pada awal tahun 2008 Syarikat Bekalan Air Selangor (Syabas) ada menghantar surat kepada Kerajaan Negeri bagi memohon pertambahan tarif mulai Januari 2009, tetapi ditangguhkan ke 31 Mac 2009. Pada Disember 2008, Menteri Tenaga, Air dan Komunikasi YB Datuk Shaziman Abu Mansor pula menyatakan bahawa menurut perjanjian konsesi, tarif air di Putrajaya, Selangor dan Kuala Lumpur boleh dinaikkan sehingga 37% pada Januari 2009. Walau bagaimanapun, tindakan ini ditunda ke 31 Mac bagi membolehkan proses penstrukturan semula industri air di Selangor. Dalam perjanjian tersebut, lebih banyak kenaikan tarif air dijangka berlaku pada sehingga tahun 2035; iaitu kenaikan 25% pada tahun 2005, 10% pada tahun 2019, dan 5% pada tahun-tahun 2021, 2024, 2027 dan 2030.

Amalan pengambilan alihan ini sebenarnya dilakukan sejajar dengan keinginan Kerajaan Pusat untuk mewujudkan hanya satu industri air menerusi penggabungan beberapa syarikat air. Daripada perspektif Kerajaan Negeri, penggabungan kesemua industri air di Selangor merupakan satu amalan yang bersifat holistik kerana dapat mengurangi pembaziran dan pemilikan beberapa pihak. Daripada segi lain pula, matlamat utamanya penggabungan industri air ini bagi menghindar berlakunya peningkatan tarif terutamanya dalam keadaan kemelesetan ekonomi yang melanda ke seluruh dunia sekarang.

Kedudukan Semasa Industri Air Selangor

Pada masa lalu, industri air diletakkan dalam jabatan Kerajaan Negeri, daripada pengurusan air mentah, hingga ke perawatan dan pengahihan air. Cara pengurusan itu kini sudah berubah, yang pertamanya oleh sebab pengagihan air diserahkan kepada Perbadanan Urus Air Selangor Berhad (PUAS), iaitu syarikat swasta milik Jabatan Bekalan Air (JBA), yang juga kemudiannya diswastakan sejajar dengan dasar penswastaan Kerajaan Malaysia.

Dengan yang demikian, industri air di Selangor kini dalam keadaan berpecah-pecah, dan dimiliki oleh beberapa pihak tertentu. Kerajaan Negeri melalui Lembaga Urus Air Selangor (LUAS) mempunyai hak sepenuhnya terhadap air mentah. Walau bagaimanapun, hak terhadap perawatan air nampaknya dipecahkan kepada beberapa pihak lagi, iaitu antara Kerajaan Negeri, Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH), Konsortium ABASS Sdn Bhd (Abass) dan Puncak Niaga (M) Sdn Bhd. Pengagihan air pula diswastakan sepenuhnya dan diuruskan oleh Syarikat Bekalan Air Selangor (Syabas). Dengan hal yang demikian, terdapat empat konsesi air di Selangor.

Sebenarnya, falsafah asal penswastaan bagi memastikan industri-industri diuruskan dengan cekap dengan membekalkan air berkualiti dan mempunyai system pengaihan yang efisien bagi faedah orang ramai dan di samping dapat mengurangi beban kewangan yang dipikul oleh kerajaan. Walaupun peruntukan kemudahan awam sepatutnya memihak kepada kepentingan awam, namun hasrat tersebut sehingga hari ini belum dapat dilaksanakan dengan memuaskan oleh industri air di Selangor.

Syarikat Konsesi

  • Syarikat Bekalan Air Selangor (SYABAS)

    • Syabas dimiliki oleh Puncak Niaga (70% saham) dan anak syarikat kerajaan Selangor Kumpulan Darul Ehsan Sdn Bhd (30% saham). Konsesi digerankan kepada Syabas melalui perjanjian 30 tahun pada tahun 2005 bagi mengagihkan air kepada pengguna di selangor, Kuala Lumpur dan Putrajaya. Id diperbadankan pada 8 Julai 1996 dengan tujuan utamanya bagi mengambil alih tanggungjawab pengagihan air daripada Perbadanan urus Air Selangor Berhad (PUAS), iaitu badan korporat yang sebelumnya di bawah Jabatan Bekalan Air (JBA).

  • Puncak Niaga (M) Sdn Bhd

    • Puncak Niaga (M) Sdn Bhd ialah dipunyai keseluruhan oleh Puncak Niaga Holdings Berhad (public-listed), dan ia memegang 5 konsesi loji rawatan air dengan Kerajaan Negeri Selangor untuk operasi, pengurusan, dan juga penyelerasan 29 loji rawatan air keseluruhannya. Ia juga memegang 70% saham SYABAS, yang mempunyai konsesi untuk pengurusan pengeluaran air.

  • Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH)

    • SPLASH merupakan syarikat penswastaan yang ditubuhkan khusus bagi pengawalan dan penyenggaraanj (O&M) kemudahan perawatan air Sungai Selangor Fasa 1 dan Sungai Selangor Fasa 3 untuk mengawal kemudahan perawatan air dan empangannya. Perjanjian penswastaan ini ditandatangani pada tahun 2000 antara SPLASH dan Kerajaan Negeri Selangor. Pemegang saham SPLASH seperti berikut: 30% Kerajaan Negeri melalui Kumpulan Perangsang Selangor (KPS), 30% oleh Sweetwater Alliances Sdn Bhd, dan 40% oleh Gamuda Berhad.

  • Konsortium ABASS Sdn Bhd (Abass)

    • ABASS merupakan syarikat khusus ditubuhkan pada tahun 1999 untuk mengambil alih kerja penswastaan bagi pengawalan dan penyenggaraan loji perawatan air Semenyih dan empangannya, yang meliputi perjanjian untuk mengambil alih, mereka bentuk, membina, menguji dan pengawasan pakej pengagihan dalam projek SSP3. Pemegang sahamnya seperti berikut: 100% milik Titisan Modal (M) Sdn Bhd, yang dimiliki oleh Kumpulan Peransang Selangor (55%) dan Operasi Murni Sdn Bhd (45%), iaitu sebuah syarikat swasta yang terlibat dalam perniagaan dan pelaburan umum.

Perjanjian Konsesi air

Hasrat untuk menyegerakan langkah terakhir pengambilalihan industri air di Selangor oleh Kerajaan Negeri disebabkan oleh perkara-perkara yang kurang menyenangkan yang terdapat dalam kandungan perjanjian asal konsesi air itu, iaitu pada terma yang dilihat berat sebelah, mahupun pada klausa perjanjian yang dilihat tidak adil.

Kerajaan Negeri sekarang tidak mahu menerima terma-terma mengenai keuntungan yang ditawarkan tanpa mengambil kira prestasi dan terma-terma pembayaran yang tidak adil kepada syarikat-syarikat konsesi. Kerajaan Negeri sekarang juga tidak boleh mempersetujui tentang jadual peningkatan tarif yang dicadangkan dalam perjanjian tersebut.

Terdapat bukti yang menunjukkan Syabass melakukan pecah amanah terhadap terma utama konsesi tersebut, termasuk melakukan pecah amanah pada siling capex (pembiayaan modal) dan kerja pembiayaan operasi, kegagalan melaksanakan tender terbuka dan tidak memasukkan ahli dewan undangan negeri sebagai ahli lembaga Syabas. Lebih 72% kontrak yang bernilai RM600 juta didapati pernah diberikan kepada syarikat-syarikat terpilih menerusi perundingan langsung dan hanya 25% menerusi tender terbuka.

Juga terdapat penyelewengan yang melibatkan lebih RM525 juta antara ringkasan kontrak yang diberikan pada tahun-tahun 2005, 2006 dan 2007, dan dalam dokumen penilaian Syabas. Dalam hal ini, Kerajaan Negeri selangor sudah menghantar surat kepada Menteri Tenaga, Air dan Komunikasi untuk membatalkan konsesi 30 tahun pembekalan air oleh Syabas pada tahun 2005. Namun, hingga sekarang pihak kami belum menerima jawapan daripada Kementeriaan berkenaan.

Kuasa Menteri dalam Pelaksanaan Penstrukturan

Seksyen 191(5) Akta Perkhidmatan Air (Akta 655) atau WSIA menyatakan, bahawa

“Ketetapan mengenai jumlah isu kepentingan awam dalam negara yang berbangkit daripada penguatkuasaan Akta ini hendaklah dilakukan oleh Menteri berkenaan dan ketetapan tersebut hendaklah muktamad dan dipatuhi oleh smua pihak, dan tidak boleh dicabar, dirayu, dinilai, dimansuhkan atau dipersoalkan di mahkamah.”

Adalah jelas yang Menteri Tenaga, Air dan Komunikasi mempunyai kuasa bagi menetapkan jumlah kepentingan awam bagi memastikan pelaksanaan proses penstrukturan semula, yang termasuk kemungkinan pemberhentian perjanjian-perjanjian konsesi.

Federal Government’s Move to Consolidate the Water Industry

Suruhanjaya Perkhidmatan Air Negara (SPAN)
Under the National Water Services Commission Act 2006, SPAN is empowered to supervise and regulate water supply services and sewerage services, as well as enforce the water supply and sewerage services laws and for related matters.

Pengurusan Aset Air Berhad (PAAB)

PENGURUSAN ASET AIR BERHAD (PAAB) or Water Asset Management Company (WAMCO) was established on 5th May 2006 as a wholly owned company under the Minister of Finance Incorporated. PAAB forms part of the Federal Government’s efforts to restructure the water services industry in the country. The Government via PAAB will acquire and/or build new water assets, which will then be leased to operators. PAAB undertakes the funding of the acquired or new assets via internal funds or funds raised through the capital market.

Rancangan Penstrukturan Semula Kerajaan Negeri Selangor Diganggu Gugat

Kerajaan Negeri Selangor sekarang telah mengeluarkan tawaran kepada empat syarikat konsesi air, iaitu Syabas, Puncak Niaga, Abass dan Splash berdasarkan nilai yang adil dan berpatutan. Mereka diberikan tarikh akhir sehingga 20 Februari 2009 untuk memberikan jawapan terhadap tawaran Kerajaan Negeri, tetapi semua telah menolak tawaran ini, dan menyatakan bahawa harga ini tidak diterima. Pada 18 Februari sebelum tarikh akhir tawaran Selangor, Kerajaan Persekutuan melalui Dato’ Teo Yen Hua dari SPAN telah menyatakan bahawa PAAB akan memintasi Kerajaan Selangor untuk merunding terus dengan syarikat konsesi.

Kerajaan Negeri pada awalnya merancang untuk akhirnya menyerahkan aset air — termasuk aset negeri – kepada PAAB, tetapi mengekalkan operasi penyenggaraan dan pengawasan perawatan air dan pengagihan di Selangor. Hal ini dirancang dilakukan sejajar dengan pelaksanaan penstrukturan semula industri air di peringkat kebangsaan. Sekiranya transaksi ini dapat dilakukan dengan lancar, maka tindakan ini merupakan bahagian daripada perancangan holistik Kerajaan Negeri dalam usaha mengoperasi dan mengurus industri air secara cekap dan bermutu bagi kepentingan rakyat Selangor seluruhnya.

Kerajaan Negeri telah menerima maklumat bahawa PAAB telah memulakan perundingan terus dengan syarikat-syarikat konsesi air tanpa penglibatan Kerajaan Negeri. Di bawah seksyen 191(4) dan 191(7) dalam Akta WSIA 2006, ini dianggap sebagai menyalahi undang kerana Kerajaan Negeri ialah “counterparty” kepada perjanjian-perjanjian.

March 30, 2009 · Filed Under Taklimat

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Taklimat Awam Penstrukturan Semula Industri Perkhidmatan Air Selangor

Shah Alam ,16 FEB 2009 – Kerajaan Negeri Selangor Pimpinan Pakatan Rakyat buat julung-julung kalinya akan mengadakan satu program taklimat awam – Penstrukturan Semula Industri Perkhidmatan Air Selangor, pada 18 Febuari (Rabu), jam 11 pagi, di Auditorium Dewan Jubli, Bangunan SSAAS, Shah Alam. Taklimat akan diberikan oleh ahli-ahli Panel Penilai Air, Kerajaan Negeri Selangor.

Taklimat awam ini bertujuan bagi menerangkan kepada masyarakat umum mengenai usaha penstrukturan semula industri perkhidmatan air di negeri Selangor. Objektif taklimat awam diadakan adalah untuk menjelaskan latar belakang proses penstrukturan semula industri air di Selangor, memberi maklumat yang relevan dengan rancangan dan tindakan semua situasi semasa. Arah Kerajaan Negeri dalam hal penstrukturan semula perkhidmatan air negeri Selangor akan dibincangkan serta memberi penekanan terhadap kepentingan orang ramai dalam hal penstrukturan semula industri air.

Justeru itu, adalah menjadi hasrat Kerajaan Negeri Selangor bagi merencanakan objektif taklimat ini supaya dapat direalisasikan. Kerajaan Negeri Selangor juga berharap program seperti ini akan menjadi buah mulut serta contoh terbaik perbincangan secara terbuka anjuran Kerajaan Pakatan Rakyat untuk rakyat. Program sebegini juga sebenarnya akan memberi lebih ruang serta peluang kepada Kerajaan Negeri bagi meneruskan lagi kesinambungan polisi “Merakyatkan Ekonomi Selangor” seiring dengan perjuangan Kerajaan Pimpinan Pakatan Rakyat yang mementingkan Negeri Berkebajikan.

SEKRETARIAT AKHBAR
PEJABAT DATO’ MENTERI BESAR SELANGOR

March 30, 2009 · Filed Under Taklimat

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