Selangor water restructuring completed with 4 deals inked

The agreements -- comprising the Facilities Agreement, Lease Agreement, Settlement Agreement and Rights of Use Agreement -- are conditions precedent to effect the master agreement for the restructuring exercise.

Ongkili said with the sealing of the agreements, Pengurusan Air Selangor Sdn Bhd (Air Selangor) should finalise the takeover of Puncak Niaga (M) Sdn Bhd (PNSB) and Syarikat Bekalan Air Selangor (SYABAS) within two weeks of the coming into force of the master agreement on Sept 9.

"After the completion of the takeover of PNSB and Syabas, Air Selangor should also finalise the takeover of Konsortium ABASS within four months,” he told reporters after attending the signing of the four agreements between Pengurusan Aset Air Bhd (PAAB) and Air Selangor here on Tuesday.

The agreements were signed by PAAB Chief Excutive Officer (CEO) Datuk Ahmad Faizal Abdul Rahim and Air Selangor CEO Suhaimi Kamaralzaman, witnessed by Ongkili and Selangor Menteri Besar Mohamed Azmin Ali.

Under the Master Agreement inked on Sept 12, 2014 among the federal and Selangor state governments, PAAB and Air Selangor, the federal government will provide a RM2 billion allocation to enable the state government to take over the equities of the concessionaires involved and, via PAAB, their liabilities totalling RM7.694 billion.

In return, the state government will hand over its water assets to PAAB.

These assets will be re-leased by PAAB to Air Selangor for a 40-year period, as practised in the restructuring of the water industry in other states.

Meanwhile, Ongkili said the Facilities and Services licences issued to Air Selangor will enable it to acquire assets in Selangor and provide water supply services in Selangor, Kuala Lumpur and Putrajaya.

"However, these licences will only take effect on Feb 22, 2016 to enable the fulfillment of the conditions precedent to the Facilities Agreement,” he said.

He said the state government had also given the necessary approvals to enable PAAB to continue with the construction of the Langat 2 water treatment plant and its distribution system, expected to be fully operational in 2019.

Meanwhile, Mohamed Azmin in the same press conference said negotiations between the Selangor government and Splash on the offer to take over water assets of the concessionaire are still ongoing.

He said the talks are still premature, with Splash given until July next year to conclude the negotiations.

The Selangor government had made a net offer of RM250.6 million in February last year to buy the water assets owned by Gamuda Bhd.