SHAH ALAM, 20 FEB: The State Government has offered RM 9.65 billion to four companies that are currently managing the water industry in Selangor, Kuala Lumpur and Putrajaya, to takeover their operations.
The offer will give a return of 12 percent per annum of the equity to the companies and is the latest effort by the State Government to restructure the water industry to be more efficient.
RM 9.65 billion offer will give greater returns compared to the current rate of only 6 percent per annum.
If this offer is accepted, the State Government will manage the entire treated water supply system which all this while have been facing problems of high rates of water losses, supply disruptions and unreasonable increases in price.
The offer will be made through the Darul Ehsan Group Berhad (KDEB) to the Selangor Water Supply Company (Syabas), Puncak Niaga Sdn Bhd, Knosortium Abbas Sdn Bhd (Abbas) and Syarikat Pengeluar Air Selangor Holding (Splash).
According to the 2004 water prioritisation agreement, treatment of raw water is managed by Puncak Niaga, Abbas and Splash. Meanwhile the supply system of treated water is conducted by Syabas.
Chief Minister, Tan Sri Abdul Khalid Ibrahim informed that the offer letter has already been officially issued by KDEB this afternoon.
“The method of acquisition will be done through two stages. We will pay equity to each of the companies. All liability assets will be taken over through KDEB, while matters in regards to ownership will be managed by the State Government.
“KDEB is only the equity holder while Menteri Besar Incorporated (MBI) will hold it overall.
He explained that all liabilities will also be taken over by KDEB through the Special Purpose Vehicle.
“I have already signed the letter. This effort is to restore the water rights to Selangor. The State Government was elected by the people to govern the state, therefore we have the right to manage the water industry.
“We believe that the acquisition process will carry out smoothly as this offer is the best offer by the people of this state to defend their water rights,” he told reporters at a media conference after the recent Exco Meeting.
Abdul Khalid added that the State Government will give the companies 14 days to respond to the offer.
“I was told that these companies will bring up our offer in their annual general meeting (AGM), where their shares will be managed by the stock market.
“So this will take some time…let them bring up the offer at the meeting where shareholders will determine as to whether they agree or not,” he said.