Water restructuring delay has serious economic implications

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KUALA LUMPUR (Mar 14): Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS) said that the unresolved water restructuring issue has serious economic implications, due to the delay of a number of projects, including the Langat 2 project.

In a statement, Tan Sri Rozali Ismail, executive chairman of SYABAS and Puncak Niaga Holdings Bhd (PNHB), said the postponing of these projects has resulted in the foregoing of supply of a total 850.82 million litres of water to 1,038 new developments.

"The postponing of these big projects involves billions of ringgit in investment, and will definitely impact the economic growth of the country, and have also resulted in the loss of employment opportunities in Selangor, Kuala Lumpur and Putrajaya," said Rozali.

To recap, PNHB had agreed to sell its unit Puncak Niaga (M) Sdn Bhd and its 70%-owned SYABAS to Pengurusan Air Selangor Sdn Bhd for RM1.55 billion on Nov 11, 2014.

Following the sale of water assets, PNHB shareholders are also expected to receive a special dividend of RM1 per share, which translates to a 37% dividend yield.

However, the transfer of water assets had been extended three times to March 9, 2015, due to the non-fulfillment of the conditions precedent stated in the conditional sale and purchase agreement.

On Friday, PNHB said in a filing with Bursa Malaysia that it had received a request from Air Selangor for an extension from March 9 to April 9 for the fulfilment of the conditions.

Last Monday, Selangor Menteri Besar Mohamed Azmin Ali said that no further extension would be granted for the agreement which lapsed on the same day.