Federal govt, Selangor sign master agreement on water industry restructuring

The federal government and Selangor government today signed the master agreement to finalise the restructuring of the state's water supply industry.

With the signing of this agreement, Air Selangor Sdn Bhd, a new entity, will take over the operations and maintenance of the water treatment plants and water supply services which were previously managed by four concession companies.

The agreement was signed by Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah, on behalf of the federal government, State Secretary Datuk Mohammed Khusrin Munawi, on behalf of the Selangor government, while Pengurusan Aset Air Berhad was represented by its chief executive officer Datuk Ahmad Faizal Abdul Rahman and Air Selangor Sdn Bhd by its CEO Suhaimi Kamaralzaman.

It was witnessed by Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili and Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim.

Also present were Transport Minister Datuk Seri Liow Tiong Lai, Rural and Regional Development Minister Datuk Seri Mohd Shafie Apdal, the four state exco members from PAS, and senior federal government and state government officials.

Ongkili said with the signing of the master agreement, the federal government was confident a comprehensive transformation of water supply services for Selangor, Kuala Lumpur and Putrajaya could be undertaken by Air Selangor Sdn Bhd to ensure efficiency, viability and sustainability of the water industry.

"This will be done in a way which can safeguard the interests of all the parties involved to enable the Selangor government achieve its aim of managing water in a holistic manner."

Ongkili said the federal government too was committed to facilitating the taking over of Syarikat Pengeluar Air Sdn Bhd (Splash) by Air Selangor Sdn Bhd.

He said the construction of the Langat 2 Water Treatment Plant (Langat 2) and its distribution system (LRAL2) would continue to be monitored through the LRAL2 Project Implementation Special Committee chaired by the Energy, Green Technology and Water minister and the Selangor menteri besar.

Ongkili said all the parties involved must play their respective role to ensure the agreement reached at could be implemented smoothly by setting aside the different political ideologies in the interest and wellbeing of the people.

He said although the process took a long time, about 15 months, both sides (federal and Selangor governments) were still committed and believed that political considerations must be set aside in order to achieve the objectives.

"We have used every standard principle of transparency and professionalism in all the discussions. I am very confident of the principles and resolutions which we finally reached at as contained in this master agreement," he said.

Before this, the federal and Selangor governments had signed two agreements on water, namely the memorandum of understanding (Mou) on Feb 26 and heads of agreement (HoA) on Aug 1, this year.

The master agreement covers the following:

i) Air Selangor Sdn Bhd takes over three water concessionaires in Selangor, namely Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Sdn Bhd (PNSB) and Konsortium ABASS Sdn Bhd (Abass) and the water services licence holder, Konsortium Air Selangor Sdn Bhd (KASB).

(ii) Pengurusan Aset Air Bhd (PAAB) provides an allocation of RM1.68 billion to facilitate the taking over of the concessionaires - Syabas, PNSB and Abass - by Air Selangor Sdn Bhd in line with the MoU and HoA.

In return, the Selangor government will transfer the water assets ownership to PAAB on a leasehold for 45 years with the same amount of allocation.

(iii) PAAB will take over the liabilities of the concessionaires and federal government loans to the Selangor government, Syabas and PNSB estimated at RM7.45 billion.

In return, the state government will transfer its water assets ownership to PAAB in the same amount on a leasehold basis for 45 years.