Selangor state and Splash should resume talks on water assets sale, says Ongkili

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KUALA LUMPUR (Nov 12): The Selangor state government needs to resume talks with Syarikat Pengeluaran Air Selangor (Splash) to complete the last piece of the puzzle in the state's water consolidation exercise, Energy, Water and Green Technology Minister Datuk Seri Dr Maximus Ongkili said.

The ball is in the state government's court, he said when commenting on the long delayed water asset consolidation exercise, adding that the state has ten more months to complete the full integration of its water assets.

"They [Selangor government and Splash] need to resume talks," Ongkili told The Edge at the Parliament lobby today.

Ongkili reiterated that the federal government would not make any offer to the water concessionaire companies. The federal government would only be the "matchmaker" and "regulator" in the water restructuring exercise in Selangor.

When asked if a higher price should be offered to Splash, Ongkili said it was up to the state government to make any offer.

Last week, the new Selangor Mentri Besar Mohamed Azmin Ali made clear his stance on the impasse in the water asset consolidation exercise which had dragged on for several years. Azmin warned that the water concessionaires should not dragged their feet in signing the agreement with the state government.

He said the state government would not side the concessionaires and would deem their tardiness as preventing consumers and the people from benefiting from the restructuring.

The Selangor state government controlled 30% equity stake in Splash through its investment arm Kumpulan Perangsang Selangor Bhd (KPS). Gamuda Bhd is the largest stakeholder in Splash with a 40% equity interest and businessman Tan Sri Wan Azmi Wan Hamzah's The Sweet Water Alliance Sdn Bhd holds a 30% stake.

Gamuda and The Sweet Water Alliance Sdn Bhd had rejected the net offer of RM250.6 million by the state on the basis that it is 90% undervalued of its growing asset as the price tag did not take into account future earnings that the water concessionaire would have foregone after the sale.

Yesterday, Puncak Niaga Holdings Bhd had signed a conditional sale and purchase agreement with Pengurusan Air Selangor Sdn Bhd (PASSB), a wholly owned subsidiary of state investment arm Kumpulan Darul Ehsan Bhd (KDEB) to sell the former’s water assets for RM1.55 billion cash.

This is a step closer for Puncak Niaga to dispose of its water treatment assets. However, the asset sale is conditional upon the approval of several parties, including Puncak Niaga shareholders.