KUALA LUMPUR: Both the state and federal governments have kept to the 60-day deadline to sign the four supplementary agreements related to Selangor’s water asset consolidation exercise.

Four agreements were signed yesterday between state-owned Pengurusan Air Selangor Sdn Bhd (Air Selangor) and Pengurusan Asset Air Bhd (PAAB), which is controlled by the federal government. The agreements were the Facilities Agreement, Lease Agreement, Rights of Use Agreement and Settlement Agreement.

However, this certainly does not mark the completion of Selangor’s long-delayed consolidation exercise, simply because Pengeluar Air Sungai Selangor Sdn Bhd (Splash), the state’s largest water treatment plant, has not agreed to sell its water assets to the state government as the former demands a higher price.

According to Energy, Green Technology and Water Minister Datuk Seri Maximus Ongkili, the ball remains in the state’s court but the federal government may lend a helping hand to resolve the impasse if Selangor needs it.

“Now it is for the state to make the offer to them [Splash] and [work out] the costing and the federal [government] can then consider how much and how we can help,” said Ongkili, noting that the pricing for Splash was up to the state to decide.

“There are 12 months to conclude the restructuring of Splash, and there is about RM300 million left [from the RM9.65 billion allocated for the acquisition of the four water concessionaires by Selangor].

“If the amount is more ... then the state government will do the proposal to the federal government if they need our help,” Ongkili said

Gamuda Bhd owns a 40% stake in Splash, while Tan Sri Wan Azmi Wan Hamzah and the Selangor state holds 30% each. Gamuda group managing director Datuk Lin Yun Ling once said Splash should be valued at least at its book value of RM2.8 billion compared to the state’s offer of RM1.8 billion.

The four concessionaires are Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), which distributes treated water in the Klang Valley, Puncak Niaga Sdn Bhd (PNSB), Splash and Konsortium Abass Sdn Bhd. Both Syabas and PNSB are controlled by Puncak Niaga Holdings Bhd, which has agreed to sell all its water assets.

Selangor Menteri Besar Mohamed Azmin Ali, who was seated beside Ongkili at the signing ceremony, was tight-lipped on the price being negotiated with Splash. “I don’t think we can reveal the amount now, as discussions are still premature. And certainly we will go back to the federal [government] to discuss the details,” he told reporters. But Mohamed Azmin is confident that the state should be able to conclude the negotiation with Splash before July next year.

The menteri besar said the signing of the four agreements had facilitated 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 the four concessionaires.

This article first appeared in digitaledge Daily, on September 9, 2015.