SHAH ALAM, 16 May: The Selangor water industry acquisition saw positive developments when two other water concessionaires agreed to the offer of the acquisition of equity, assets and liability by the Selangor Government.
The two companies are Puncak Niaga Sdn Bhd (PNSB) and Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS), owned by Puncak Niaga Holdings Berhad (PNHB), and the agreement is subject to a formal approval from shareholders of the two companies after the extraordinary general meeting (EGM) is held.
This decision was made by the Minister of Energy, Green Technology and Water, Datuk Seri Panglima Dr Maximus Ongkili, after getting feedback from the Selangor Government at a meeting between him and the Chief Minister, Tan Sri Abdul Khalid Ibrahim.
Abdul Khalid said that the decision reached by the two parties is the first step towards improving the water services industry in Selangor, the Federal Territories of Kuala Lumpur and Putrajaya.
“This means that three of the four water concessionaires in Selangor, as of today, have agreed to the acquisition offer by the Selangor State Government. Previously, ABASS shareholders agreed with the offer to acquire the equity, assets and liabilities for a price of RM990 million.
“It should be noted that the sale of equity, assets and liabilities for PNSB, SYABAS and ABASS, amounting to RM6.57 billion, is in line with the amount agreed upon in the Memorandum of Understanding (MoU) dated February 26, 2014, between the Federal Government and the Selangor State Government,” he said in a press statement.
He said that the total amount to acquire the four water concessionaires in Selangor, as agreed in the MoU, which was then offered by Kumpulan Darul Ehsan Berhad (KDEB) to the shareholders of the water concessionaires in Selangor on the same date, was RM9.65 billion.
With this development, the Federal Government decided to postpone the enforcement of Section 114 of the Water Services Industry Act (WSIA) 2006 for the time being as there is no need to use it and this decision was also supported by the Selangor Government.
Under the agreement, PNHB accepted the Selangor Government’s offer to acquire all of PNSB and SYABAS equities, assets and liabilities, respectively amounting to RM2.47 billion and RM3.11 billion.
In the meantime, the agreement reached between the Federal Government and the Selangor Government is for the price of bulk water supplied by Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) to be reviewed to obtain a reasonable price because shareholders still do not agree with the Selangor Government’s offer.
Nevertheless, the Selangor Government is still prepared to proceed with the acquisition of Splash if the concessionaire agrees to the price offered by the state government on Feb 26, 2014.
“With the acceptance of the offer by the three companies, Selangor has agreed to continue the water services restructuring with a discussion of signing the stock purchase agreement between KDEB and shareholders of the involved companies.
“The Selangor Government will also continue talks to sign the sale and leaseback agreement of water assets to the Federal government and Water Asset Management Berhad (PAAB).
“The sale of Selangor’s water assets to PAAB which amounts to RM2 billion will help in meeting the requirement to pay part of RM9.65 billion for the acquisition exercise,” he said.
Both Federal and state governments have also agreed to expedite the establishment and functioning of the committee that will monitor and ensure the construction of the Langat 2 water treatment plant and distribution system (Scheme LRAL2) can be implemented according to a schedule that is in accordance with the water supply operation and services for Selangor, the Federal Territories of Kuala Lumpur and Putrajaya.
With this development, all the requirements and approvals relating to land and permits to complete LRAL2 Scheme will soon be issued by the state as per the MoU agreement and Heads of Agreement which will be executed jointly by the Federal Government and the Selangor Government.
