SHAH ALAM, 12 Mar: The use of Section 114 of the Water Services Industry Act 2006 (WSIA 2006) in the restructuring of the water industry effort is expected to save the Selangor Government RM2 billion.

The Chief Minister, Tan Sri Abdul Khalid Ibrahim, said that the state government is only expected to pay RM7.65 billion to concessionaires compared to the RM9.65 billion offer previously made through Section 114 of the WSIA.

He said that the state government will also ensure that the savings are used in the best way possible to improve the quality of water to over seven million consumers in Selangor, the Federal Territory of Kuala Lumpur and Putrajaya.

“Thanks to the Federal Government and the Ministry of Energy, Green Technology and Water for agreeing to facilitate the method of restructuring of the water industry in the state after negative response from concessionaires to the acquisition offer by the State Government.

“We will reduce the rate of non-revenue water (NRW) with various initiatives, including the implementation of the district metered zone (DMZ) and the district metered area (DMA), as well as the management of integrated meters.

“We will replace existing pipes with fibre optics and establish the Ground Penetration Radar (GPR) to detect leaks in the underground distribution system,” he said after chairing the Executive Council Meeting session today.

Yesterday, he held a discussion with the KeTTHA Minister, Datuk Seri Maximus Johnity Ongkili, who then agreed to enforce Section 114 of the WSIA for the success of the restructuring of the water industry in Selangor.

The offer period which ended at 5pm yesterday only witnessed ABBAS as the sole concessionaire to accept the offer while the three other concessionaires, SYABAS, Puncak Niaga and SPLASH have rejected the offer.

Elaborating, Abdul Khalid said that through Section 114 of the WSIA which was used, the concessionaires now have no chance to obtain the assessment of international arbitration.

“This means that only ABBAS will accept the offer made previously, while other concessionaires will receive a lower offer.

“Through the WSIA, the Federal Government will acquire the assets (of concessionaires) and then issue a licence to Kumpulan Darul Ehsan Berhad (KDEB) to manage operations (Selangor water industry),” he said.

Previously, through a Memorandum of Understanding (MoU) signed on 26 February, the Federal Government agreed to inject RM2 billion for the success of the restructuring of the water industry in Selangor.

With the use of Section 114 of the WSIA, the State Government now has an extra RM2 billion, bringing the total to RM4 billion.