KUALA LUMPUR: The federal and Selangor state governments are at odds with each other over the ownership of the land where the water assets such as treatment plants and water pipes are located.

“Our discussion from day one [with the federal government] is only on the assets that need to be surrendered to the federal government through PAAB (Pengurusan Aset Air Bhd),” Selangor Menteri Besar Mohamed Azmin Ali told reporters outside the Parliament lobby yesterday.

He said prior to signing the master agreement, representatives from both Selangor and the federal governments had gone through the assets list consisting of pipes, water treatment plants, reservoirs and pump stations with a total value of RM14.9 billion.

“The RM14.9 billion is only for water assets and not the land ... but if they (federal government) have new suggestions, we are prepared to discuss and make a valuation of the land involved,” said Mohamad Azmin.

Also, Mohamad Azmin pointed out that a new agreement should be drafted since the master water agreement that was signed between the state and federal governments in September last year had lapsed two days ago.

However, Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili disputes the state’s view, saying that the master water agreement had already taken into account the land issue.

“They (Selangor government) did not read [the master water agreement] properly because the definition of assets include actual land,” said Ongkili, disputing claims by Selangor that the federal government did not honour its part in the deal.

The minister noted that he would have to engage all parties involved including Selangor, ministry officials and his lawyers in the matter.

He stressed that the land where the water assets are on can be returned to the state government after the expiry of the 45-year lease and that the federal government does not have to claim ownership.

Meanwhile, Ongkili does not see the need to draft a fresh water agreement. He said it was preferable to stick to the master water agreement.

“I have not given up the opportunity to conclude and settle the water issue. I am just worried that maybe it is not the technicality that is governing their (state government) decision but the politics of it,” he told reporters at a separate press conference yesterday.

The minister explained that the federal government did not contravene the terms of the master agreement, but it was Selangor that failed to adhere to several condition precedents to the master water agreement.

The land ownership issue is the contention point that has delayed the water asset consolidation in Selangor that has dragged for years.

To recap, the master water agreement was then signed among the federal government, the Selangor government, PAAB and Pengurusan Air Selangor Sdn Bhd (Air Selangor).

Under the master agreement, Air Selangor, a new entity, will take over the operations and maintenance of the state’s water treatment plants and water supply services which are currently managed by four concessionaires — Syarikat Pengeluar Air Sungai Selangor Sdn Bhd, Puncak Niaga (M) Sdn Bhd, Syarikat Bekalan Air Selangor Sdn Bhd and Konsortium Abass Sdn Bhd.

Both the state and federal governments have failed to finalise the master agreement despite the extended deadline on Monday.

This article first appeared in The Edge Financial Daily, on March 11, 2015.