SHAH ALAM: The Selangor water restructuring exercise, which will see the state government take over the four water concessionaires operating in the state, will be finalised next week at the latest, said Menteri Besar (MB) Tan Sri Abdul Khalid Ibrahim.

Abdul Khalid said Syarikat Pengeluar Air Selangor Holdings Bhd (Splash), which had earlier rejected the state’s buyout offer, will also come under state control.

“The water agreement is now at the final stage for signing,” he told reporters after chairing a meeting of the state executive council yesterday, adding that it could be signed as early as this weekend.

It is understood that the deal covers multiple agreements involving the state government, the federal government and its agencies, as well as the concessionaires.

Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili could not be reached for comment as he is attending the Asia Pacific Economic Cooperation meeting in Beijing, China, and is only scheduled to return tomorrow.

Selangor signed a memorandum of understanding with the federal government in February for the state to take over the four concessionaires — Splash, Syarikat Bekalan Air Selangor Bhd (Syabas), Puncak Niaga Sdn Bhd (PNSB) and Konsortium Abbas Sdn Bhd (ABBAS) — for RM9.65 billion.

As part of the deal, the state government would issue the development order for the Langat 2 water treatment plant and the transmission pipeline.

Syabas, PNSB and ABBAS have accepted the state’s buyout offer, while Splash has rejected it.

Asked about Splash’s rejection, Abdul Khalid said the matter will be resolved by invoking the Water Services Industry Act 2006 (Wasia) as agreed to by the state and Putrajaya.

“It [Splash] will be part of the agreement. We will leave it to the end, so that it will be resolved as per Wasia,” he said.

Section 114 of Wasia provides for the state to forcibly take over Splash.

The signing of the agreement, if it takes places next week, will come at a time when Selangor is undergoing a change of leadership.

The three parties in the ruling Pakatan Rakyat government — PKR, DAP and PAS — have each submitted names to Sultan Sharafuddin Idris Shah as nominees for the post of menteri besar. It is unclear when the Selangor ruler will make a decision on the new MB.

Abdul Khalid said he wished to resign last week during an audience with the ruler, but was asked to defer his resignation pending the appointment of a new MB.

He was sacked from PKR after he refused to step down. Among the reasons he was asked to go was his handling of the water issue, especially the decision to sign the MoU in February, and subsequently a Heads of Agreement with the federal government in early August.

DAP lawmaker Charles Santiago said Abdul Khalid remains the legal MB, but morally he should not be signing the agreement as he no longer commands the majority support in the state assembly.

“He is a caretaker MB and cannot sign an agreement at this time. He is just holding the post until the next person takes over. Actually, in signing the agreement, he might be committing the state government without proper consultation,” he told The Edge Financial Daily when asked to comment.

The Klang MP also pointed out that the final contents of the agreement are not known to Pakatan and the Selangor people, and therefore the legitimacy of the process and the contract itself are questionable.

“Nobody knows the contents of the agreement, therefore the legitimacy of the document is in question. Also the agreement is under OSA [Official Secrets Act] and Selangor should not sign any agreement that is under OSA,” he said.

Practising lawyer Andrew Khoo opined that Abdul Khalid is still the MB so any agreement signed by him on behalf of the state government will be legally binding after the new MB and executive councillors take office.

When asked if the new leadership can review the provisions in the agreement, Khoo said, “Not really, the successor will be bound.”

He added that if the new leadership wished to alter the agreement, the issue of compensation may arise.

On Abdul Khalid’s alleged lack of consultation with the other members of the state executive council on the water deal, Khoo said that should not necessarily affect the legitimacy of the agreement.


This article first appeared in The Edge Financial Daily, on September 4, 2014.