KUALA LUMPUR (July 30): The Selangor state government and Syarikat Bekalan Air Selangor (Syabas) executive chairman had agreed on the state's proposal to take over the latter's operations in 2010 but the deal failed to materialise at the federal level, said Menteri Besar Tan Sri Abdul Khalid Ibrahim.
In an exclusive interview with The Edge on July 29, Khalid said the state had "quiet discussions" with Syabas executive chairman Tan Sri Rozali Ismail over a renewed offer of RM9.3 billion after the previous two offers by the state were rejected.
The first offer of RM5.7 billion for assets and equity was turned down by all four players — Syabas, Puncak Niaga Sdn Bhd, Syarikat Pengeluar Air Sungai Selangor (Splash) and Kumpulan Abass (Abass).
The second offer at RM9.4 billion, which included liabilities, was accepted by Splash and Abass but rejected by Syabas and Puncak Niaga. Rozali is the founder of Puncak Niaga and executive chairman of Puncak Niaga Holdings Bhd, which holds a 70% stake in Syabas.
"Rozali was looking at RM11 billion — but we argued that if we went any higher, part of the cost would have to be borne by the water users and we couldn't do that," Khalid told The Edge at his residence.
Khalid said Rozali eventually realised that it would be better to accept the state government's proposal, as Syabas would not be able to operate under the condition of non-increased tariffs.
The Selangor state government had in 2009 prevented Syabas from hiking its tariffs by 37% as per its concession agreement.
"So he agreed with the numbers of about RM9 billion-RM9.5 billion," Khalid said. "He was willing to go through with the process which was of course, subject to further details."
The Ministry of Water, Energy and Green Technology was tasked with submitting the takeover proposal to the Cabinet for approval — but, according to Khalid, the proposal was suddenly withdrawn for unknown reasons.
Khalid then contacted Minister Datuk Seri Peter Chin Kah Fui ,but he said Chin refused to entertain any discussions apart from the Langat 2 water treatment plant.
The RM9 billion Langat 2 water treatment plant has become the crux of the water debacle with Syabas insisting that the plant is the only solution in averting an impending water crisis.
But Khalid and Pakatan Rakyat representatives have raised suspicions over the agenda behind Langat 2, saying that there are other less costly alternatives.
In the one-and-a-half-hour interview, Khalid also spoke about Selangor's capability to boost treated water by 50% without Langat 2, and the existence of underground water sources.
For more on the interview, read the July 31 edition of The Edge Financial Daily.