While being all too willing to punish disclosure of classified information even when such revelations are in the public interest, the government seems to close its eyes to leaks when they serve to increase the profits of certain quarters, said the Coalition Against Water Privatisation (CAWP).

Details from a classified agreement between the Selangor state government and water concessionaire Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) had been revealed to potential investors in 2005 but without consequence to the leaks, CAWP coordinator Charles Santiago said.

Santiago was commenting on the move by police to question four opposition figures under the Official Secrets Act (OSA) for disclosing details of a highway toll concession between the government and Lingkaran Trans Kota Sdn Bhd (Litrak).

The opposition argued that the document showed the highway concessionaire had been guaranteed profits at the expense of road users.

Citing a April 2005 report by an equity research firm on Puncak Niaga Holdings Bhd (which owns 70 percent of Syabas) entitled 'Puncak Niaga Holdings Bhd - Deserves a second look!', Santiago said the report paints a glowing picture of Syabas' financial prospects with details that could only have come from a classified document - the Syabas concession agreement itself

CAWP and the Malaysian Trades Union Congress (MTUC) strongly objected to the water tariff increase that took place Nov 1 last year and had demanded to see the concession agreement and the audit report on Syabas.

About one month later, however, MTUC secretary-general G Rajasekaran was informed that both the concession agreement and audit report on Syabas have been classified as 'secret and confidential'.

Detailed revealed

Energy, Water and Communications Minister Dr Lim Keng Yaik soon after confirmed this and said the documents were under OSA and could only be declassified upon the Cabinet's approval.

The April 2005 report of Puncak Niaga by Kim Eng Research - which makes the 'Buy!' recommendation for its investors - speaks of "Syabas concession terms" having "sufficient safeguards to ensure it is value-accretive".

Among such terms is "a water tariff formulae which protects its downside risk," says the report.

The report then provides a table of the agreed-upon water tariff increases to occur every three years for the whole duration of the 30-year concession ending Dec 31 2034.

Following the 15 percent tariff increase that took effect on Nov 1 last year, there is a whopping 37 percent increase set to be implemented on Jan 1 2009. This is then followed by tariff increases of 25 percent in 2012 and 20 percent in 2015.

Tariff increases thereafter remain at five percent every three years until the expiry of the concession in 2034.

The Kim Eng report also details the tariff review formula, which Santiago said could not have been obtained except through access to the Syabas concession agreement.

Santiago stressed that CAWP questioned the government's selective use of it whenever shady arrangements are in the public spotlight.

"In this case of Syabas and the equity report on Puncak Niaga, why is the government not consistent in its use of the OSA? How come the police have not summoned the researcher under the OSA and ask him how he had obtained information on a document that clearly cannot be obtained from the public sphere?

"Why shouldn't what has been applied in the Litrak case be applied in this case of Puncak Niaga?" asked Santiago.