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Puncak Niaga agrees to takeover by Selangor, now only one concessionaire holds out

BY SHERIDAN MAHAVERA

Published: 16 May 2014 6:08 PM

Selangor’s efforts to restructure its troubled water industry received a major boost today when it was announced that the industry’s two biggest companies have agreed to the state government’s offer of a takeover.

This brings the number of companies who have agreed to the takeover to three, while the remaining firm, Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH), is still holding out on the state government’s offer.

The Federal government and the Selangor administration in a joint statement said Puncak Niaga Holdings Berhad (PNHB) had agreed to Selangor’s offer to take over Puncak Niaga Sdn Bhd (PNSB) and Syarikat Bekalan Air Selangor Sdn Bhd (Syabas).

The state government will be taking over the equity, assets and liabilities of PNSB and Syabas for RM2.47bilion and RM3.11 billion respectively.

PNSB manages the lion’s share of 34 water treatment plants all over Selangor which processes raw water for the residents of Selangor, Kuala Lumpur and Putrajaya.

Syabas, on the other hand, is in charge of the whole pipe distribution network from the treatment plants to the consumers.

The takeover of the water industry which was privatised in the 1990s had been an election promise by the Pakatan Rakyat-led Selangor government.

The state administration said that the privatised industry had led to consumers being charged high rates for water while they endured sub-standard service.

Since last year, the Selangor government had offered RM9.65 billion to take over all four companies and concessionaires.

After only one company, Konsortium Abaas Sdn Bhd (Abaas) accepted the offer, Selangor made a deal with Putrajaya on February 26 for help in taking over all four through legal means.

In exchange for Putrajaya using the Water Services Industry Act 2006 (WSIA) to take over all four, Selangor would approve the construction of the RM3.6 billion Langat 2 water treatment plant.

But with PNSB and Syabas’s acceptance of the offer, both the federal and state governments have postponed using WSIA, said today’s statement.

The statement was jointly signed by Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili and Tan Sri Abdul Khalid Ibrahim.

“It must be stressed that the equity, assets and liabilities of PNSB, Syabas and Abaas which totals RM6.57 billion, is not more than what was previously offered by Selangor (to them),” the statement said.

It also said the formal agreement to a takeover of PNSB and Syabas was conditional on the acceptance of the company’s shareholders in an extraordinary general meeting.

Both companies are controlled by PNHB which has been linked to former Selangor Umno treasurer Tan Sri Rozali Ismail.

“At the same time, since SPLASH’s shareholders have still not agreed to Selangor’s offer, the state and the Federal governments have agreed to review the price of bulk water which the company sells to Selangor.

“But Selangor is still open to taking over SPLASH if its shareholders agree to the price offered by Selangor,” the statement said.

Selangor also said it would speed up the process of granting permits and taking over land for the Langat 2 project so that work can begin as soon as possible. – May 16, 2014.
- See more at: http://www.themalaysianinsider.com/malaysia/article/now-three-companies-agree-to-selangors-takeover-of-water-industry#sthash.DhnpQyq4.dpuf