“RM7.65b offer final’

WATER DEAL: Federal govt to invoke Wasia in takeover of Puncak Niaga, Syabas, Splash and Konsortium ABASS assets

THE Selangor government is sticking to its collective RM7.65 billion takeover offer as the state’s water impasse edges a step closer to closure.

The federal and Selangor governments yesterday signed a heads of agreement (HoA) on the restructuring of the state’s water supply and distribution industry.

Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili represented the federal government, while Menteri Besar Tan Sri Khalid Ibrahim signed on behalf of Selangor.

Khalid said the collective RM7.65 billion offer to the state’s four water concessionaires remain unchanged, adding that the federal government is due to invoke Section 114 of the Water Services Industry Act 2006 (Wasia).

Once invoked, it will reduce the takeover cost of the four companies by RM2 billion from the initial offer of RM9.65 billion.

The move will allow Selangor to pay only RM7.65 billion to Puncak Niaga Holdings Bhd, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) and Konsortium ABASS Sdn Bhd.

Of the four, Splash remains the only one that has yet to strike a deal with both the federal and Selangor governments.

Gamuda Bhd, which controls Splash, had noted that the RM250.60 million offer was less than 10 per cent of Splash’s net asset value of RM2.54 billion as at December 2013. This would result in a divestment loss of RM920 million for Gamuda.

Puncak Niaga has a 70 per cent stake in Syabas, while Splash is 40 per cent-controlled by Gamuda, with the rest of the Splash equity evenly split between Kumpulan Perangsang Selangor Bhd and The Sweet Water Alliance Sdn Bhd.

“The success of taking over Syabas will enable the state to focus on water pipe upgrading works to reduce non-revenue water loss from the current 34 per cent.

“So far, only the takeover of Splash has not been finalised,” Khalid said, adding that the offers made to all four companies are fair and reasonable, without them incurring losses.

 Analysts pointed out that although Selangor had previously said the privatisation of the other concessionaires will still go through and do not depend on Splash, the latter’s acceptance is still needed for an ultimate closure of the water saga.

Meanwhile, Ongkili said the HoA formalisation was an extension of the memorandum of understanding signed by both parties on February 26 to build the Langat 2 Water Treatment Plant and its distribution system. -NST