KUALA LUMPUR, Feb 18 — Pengurusan Aset Air Bhd (PAAB), a unit of Minister of Finance Inc, has started talks with four water concessionaires in Selangor to resolve asset acquisition issues before March 31, or face a 37 per cent increase in tariffs early April.
The increase in tariff would affect some 1.5 million consumers in Selangor, Kuala Lumpur and Putrajaya.
National Water Services Commission chief executive officer, Datuk Teo Yen Hua, said the government has waited too long for the state government to buy over assets of the four concessionaires because of pricing issues.
“All these restructurings must be concluded before end-March otherwise the tariffs will have to go up. If they can’t do it in time, it is only appropriate for PAAB, in the interest of the public, to start moving in to see how quickly we can resolve the issue.
“We have informed the state government that PAAB will also be moving in because ultimately, these assets will also to be transferred to PAAB,” he told reporters at Dewan Rakyat here today.
Under the Water Services Industry Act 2006, all water supply assets — water treatment plants, dams and pipelines — in Peninsular Malaysia must be transferred to PAAB.
The Selangor state government had offered RM2 billion to Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) and RM3.1 billion to Puncak Niaga Holdings Bhd’s wholly-owned Puncak Niaga Sdn Bhd (PNSB) and its 70 per cent-owned Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) to take over their water assets and operations.
In Selangor, water treatment concessions are held by Puncak Niaga Holdings Bhd, Splash and Konsortium Abass Sdn Bhd, while the water distribution concession is held by Puncak Niaga’s sister company, Syabas.
Asked if PAAB would offer a higher price for the assets, Teo declined to disclose, saying that whatever price offered would benefit the consumers.
Previously, Selangor Mentri Besar Tan Sri Khalid Ibrahim said the state might face water shortages by 2014 unless it restructured the “inefficient, fragmented” water industry.
Teo said moving forward, there would be no more concession agreement but the water industry would operate under a licensing regime.
“We want to make it clear that these assets acquired by PAAB will still be leased back to the operator for them to operate. But since the cost of fund is lower and the tenure of repayment will be much longer, the pressure on tariff will not be as bad as currently faced,” he said. — Bernama
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