Federal Government and Selangor signs MoU to restructure the water industry

The Federal government was represented by Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili while the state government by Menteri Besar Tan Sri Abdul Khalid Ibrahim at the signing ceremony held at the Perdana Putra Complex here Wednesday.

The ceremony was witnessed by Prime Minister Datuk Seri Najib Tun Razak, Deputy Prime Minister Tan Sri Muhyiddin Yassin and the Chief Secretary to the Government Tan Sri Dr Ali Hamsa.

Under the MoU, the state government will issue a development order for the construction of the Langat 2 Water Treatment Plant (Langat 2) and its distribution system (LRAL2) (Package 2A) effective Wednesday and ensure that all approvals and authorisations relating to the LRAL2 project approved within 30 days.

In addition, the federal government is ready to inject additional funds to enable the state government to take over water concession companies and manage water supply in the state through a state-owned company.

The restructuring exercise is essential in ensuring sustainable and efficient water supply services in Selangor, Kuala Lumpur and Putrajaya.

The MoU also allows the state government to bid on the state's water concession companies, namely Puncak Niaga Sdn Bhd (PNSB), Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Syarikat Pengeluar Air Selangor Sdn Bhd (Splash), and Konsortium ABASS Sdn Bhd (ABBAS).

It also spells out that the federal government becomes a facilitator for the state government in implementing the restructuring exercise through the Water Services Industry Act 2006 (WSIA) and other applicable laws.

Speaking at a news conference later, Ongkili said the federal government agreed to set up a committee made up state government representatives for the implementation of the LRAL2 project.

"The federal and Selangor governments hope water concessionaires in the state will give full cooperation to ensure the success of the restructuring of the water supply services industry for the well-being of the people of Selangor, Kuala Lumpur and Putrajaya," he said.

Ongkili said the MoU was not prompted by current water crisis in Selangor but rather in the interest of the people.

"Even though Selangor is not under Barisan Nasional, the people's interest comes first... we have worked hard for more than seven months to reach a consensus," he said.

Describing the signing of the MoU as timely, Khalid said: "We have agreed to implement the restructuring of the water industry which we considered timely in light of the current situation to ensure that water consumers in Selangor, Kuala Lumpur and Putrajaya enjoy the best service," he said.

Negotiations on the restructuring exercise started in 2008 with no end in sight to the detriment of the state's water supply services industry and new development projects due to worries over water shortage.