PETALING JAYA: The Federal Government is waiting for Selangor to sign the Heads of Agreement before proceeding to invoke Section 114 of the Water Services Industry Act 2006 (Wasia), which will allow it to assume control of the four water concessionaires and a water licensee in the state.
The agreement entails the RM2bil sale of water assets to Pengurusan Asset Air Berhad (PAAB) to help the state government raise money to take over the concessionaires, matters related to the development of the Langat 2 water treatment plant and the restructuring of the water industry in Selangor as stipulated in the memorandum of understanding (MoU) between the federal and state governments inked on Feb 26.
“The agreement drafted by the Attorney-General has been sent to the Selangor government. They will have a look at it and come back to me for the documents to be signed,” said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili.
“Once that is done, we can gazette that particular section of the Act and only then can we proceed with the invocation.”
The Cabinet had on April 4 agreed that Section 114 of Wasia be invoked to ensure the security and sustainability of water supply for the people in Selangor, Kuala Lumpur and Putrajaya.
The Federal Government is stepping in after the Selangor government failed to get all four water concessionaires to accept its takeover offer by its March 10 deadline.
Only Kumpulan Perangsang Bhd, as the shareholders of Konsortium Abbas Sdn Bhd, accepted the offer while shareholders of Puncak Niaga Sdn Bhd, Syarikat Bekalan Air Selangor Bhd (Syabas) and Syarikat Pengeluar Air Selangor Holdings Bhd (Splash) did not accept.
Dr Ongkili assured that the invocation was only meant to control the operations of the companies to ensure proper production, treatment and distribution of water to the public and would not result in the Federal Government taking over the companies’ assets.
The move would also ensure the concessionaires’ financial health and their ability to service their bonds totalling RM6.2bil held by PAAB, of which the Federal Government had acted as guarantor, he added.
He also said the Federal Government would continue to facilitate negotiations between the state and the water companies in the restructuring of the water industry and would cease control over the companies under the invocation should the two sides reach an agreement.