By: Mohamed Azmin Ali
The signing of four agreements today between Selangor state-owned water company, Pengurusan Air Selangor Sdn Bhd (Air Selangor) and Pengurusan Asset Air Berhad (PAAB) marks the fulfilment of the 60-day deadline from the signing of the Supplemental Agreement of 10 July 2015.
This is a significant milestone in Selangor’s water services industry restructuring and consolidation exercise. The four agreements are the Facilities Agreement, Lease Agreement, Rights of Use Agreement and Settlement Agreement.
The Facility Agreement governs and administers the commercial terms and conditions of the lease and right of use over water assets for 45 years under the Lease and the Right of Use Agreements, while the Settlement Agreement sets out the terms of settlement of the water-related debts owing by the water concession companies.
The signing of these agreements facilitate the completion of the Master Agreement and the release of up to RM2 billion from PAAB to Air Selangor as financing for the acquisition of Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS), Puncak Niaga Sdn Bhd (PNSB), Konsortium ABASS Sdn Bhd (ABASS) and Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH).
In exchange, Air Selangor will be transferring up to RM2 billion worth of water assets to PAAB, which will subsequently be leased back to Air Selangor.
In addition, Air Selangor will be awarded a facilities license and service license, which will take effect from next year. These licenses will enable Air Selangor to provide holistic water supply services in Selangor, Kuala Lumpur and Putrajaya.
From 1 October 2015, Air Selangor is expected to take over SYABAS and PNSB and thereafter, as subsidiary companies, both will continue to provide efficient water supply services to consumers.
The provision of water supply services in Selangor, Kuala Lumpur and Putrajaya is expected to come directly under Air Selangor, as the new water services provider, in March 2016.
All efforts would then be focusing on further improving water treatment services, distribution systems, reduction of non-revenue water (NRW) and most critically continued and sufficient water supply to consumers.
The completion of the Master Agreement is a landmark event as a result of relentless concerted efforts and cooperation between the State Government and Federal Government to achieve a sustainable long term resolution that would return the rights over water supply to the people.
With the completion of the Master Agreement, the restructuring of the water services industry will be implemented according to the agreed plans.
MOHAMED AZMIN ALI
Chief Minister State of Selangor