SHAH ALAM, 25 Aug: The Selangor Government’s offer to concessionaires is not to provide compensation benefits to its shareholders; instead it is based on an annual return of equity capital invested at 12 percent.

The Chief Minister, Tan Sri Abdul Khalid Ibrahim, said that the offer also rejected any dividend paid earlier and is deemed to be reasonable because the standard rate is about eight percent.

He said that by applying the compensation formula, the Selangor Government managed to save RM3 billion in state funds with an acquisition value of RM9.65 billion.

“If you follow the logic of some parties saying that I gave compensation benefits, then the acquisition will reach up to RM13 billion.

“There are no such expenses by the State Government in taking over the water concessionaires because the acquisition cost has been fully paid through RM2 billion by Pengurusan Aset Air Berhad (PAAB) and RM7.65 billion in through the acquisition of the concessionaires’ liability.

“The value of RM7.65 billion will be settled through the transfer of concessionaires’ assets to PAAB,” he said at the Selangor Government Department Monthly Assembly at the Silver Jubilee Hall today.

In the meantime, Abdul Khalid said that allegations by some quarters saying the Memorandum of Understanding (MoU) signed does not guarantee that the Selangor Government can control the restructuring of the water industry is inaccurate.

He said that under the MoU, Kumpulan Darul Ehsan Berhad (KDEB) will take over all company interests of the water concessionaires and the central government through the National Water Services Commission (SPAN) by issuing the water licence due to KDEB.

“A committee co-chaired by the Minister of Energy, Green Technology and Water (KeTTHA), the Selangor Chief Minister and representatives from the central government, the Selangor government, PAAB and KDEB will be established to oversee and monitor the implementation of Langat 2.

“When Langat 2 is completed, KDEB will operate Langat 2,” he added.

NS