Validity of Selangor water deal questioned

The 'water deal' that was struck between the federal and Selangor government does not have the people's interests at heart, claimed PKR'S Rafizi Ramli today.

Rafizi questioned the wisdom of Selangor menteri besar Tan Sri Abdul Khalid for signing the Memorandum of Understanding(MoU), expressing concerns that the deal was lopsided and favoured the Federal Government over the state in a number of aspects.

Firstly, Rafizi claimed that the deal was not legally binding except for the clause in regards to the construction of the multi-billion Langat 2 water treatment plant.

Other aspects, especially the federal government's pledge to facilitate the state government's takeover of the four water concessionaires, is not binding and may not even be followed through by Putrajaya.

"The portion that is legally binding relates only to article 5(b) in the MoU which states clearly that the Selangor government's responsibility to 'ensure all approval and permission related or necessary with regards to the construction of LRAL2 must be given by the Selangor State Government and relevant authorities is binding and irrevocable'," said Rafizi, citing from a softcopy of the MOU inked last week.

“This means that the Selangor state government seemed to have let go of its only weapon to negotiate with the federal government, which is the Langat 2 project, without getting anything from the federal government,” he said, adding that future negotiations, if the federal government does not live up to their end of the deal, is jeopardized for Selangor because of this.

He also questioned the validity of the last minute deal as the MoU matter was believed to have not been brought up in the State exco, which is required under the state constitution.

“Without the approval of the exco meeting, the validity of this MoU can be questioned,” said Rafizi, who was speaking in his capacity as the Pandan MP.

Under the MOU, signed last Wednesday on Feb 26, 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), and ensure that all approvals and authorisation related to the project are approved within 30 days.

In return, the Selangor state government would be allowed to acquire water assets from concessionaires 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) at a cost of RM9.65bil.

In addition, the federal government is supposed to also inject funds worth RM2 billion to Selangor to facilitate the acquisition.

Rafizi today said he regarded this RM2 billion as an “extra” allocation that is being used to take over the equities of the concessions, making the total costs not RM9.65 billion but in fact, RM11.65 billion.

He said that with that, the total cost of the water restructuring deal between Selangor and Putrajaya could balloon to RM20 billion, after factoring in the cost of building the Langat 2 water treatment plant, estimated at RM8 billion at least.

“The higher the cost of the Langat 2 project, the higher will be the public debt and the water tariff that the rakyat must foot," said Rafizi today.

Rafizi called on Khalid to immediately answer these issues he has raised as they would cause more speculation.

The MoU, negotiated since 2008, is touted to be able to reverse decades of privatisation of the Selangor water industry, and allow the state to take full control of water management. This was claimed to be able to solve the water woes now being faced by the folks in the Klang Valley.

Khalid’s move to sign the deal, especially allegedly without consulting PKR party officials, have come under criticism. The Selangor MB has been accused of acting against some of his colleagues in the party and to have benefited from the deal.

-- By Teoh El Sen & Vilashiiney Panneerselvam