Parliamentarians on the Selangor Water Review Panel have called upon the support of the federal government to aid in acquiring the state's privatised water concession and slammed claims that Selangor's offer to acquire the asset was too low.

On Feb 13, Selangor offered a total of RM5.184 billion to Puncak Niaga Holdings Bhd which owns 70 percent of Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) and Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) to take over their water assets in the state.

However, it has been argued that the amount is too low and unreasonable.

At a press conference at the Parliament lobby today, MPs Tony Pua (DAP-Petaling Jaya Utara-DAP), Charles Santiago (DAP-Klang), William Leong (PKR-Selayang) and Dzulkifli Ahmad (PAS-Kuala Selangor) said the Energy, Water and Communication Ministry should not buy the back the concession at an inflated price.

tony pua interview 170308 02 "The people have suffered once already when the assets were forcibly privatised by the government. We call upon the minister (Shaziman Abu Mansor) not to rape the country twice," said Pua.

"By doing so the government will only provide the basis to the dictum that the Barisan Nasional government prioritises profits and nationalises losses," he said.

Pua explained that when the privatisation took place, the government had paid the concessionaires a huge sums in profits and "when we buy them back, we pay them another round of profits".

He added that the offer which was made by the Selangor government was made on the grounds on the book value of the concessionaires and a fair reasonable return to the equity invested by the companies when the privatisation first took place.

"It should be noted that the offer made by Selangor is guided and in compliance with the terms and conditions willingly signed by all parties in the concession agreement," said Pua reiterating that the acquisition offer is neither cynical nor without basis.

Govt' does not have to comply

Santiago, when met later, said the government did not have to abide by the quotation put forward by Puncak Niaga as its subsidiary Syabas had broken several regulations and conditions in its concession agreement with Selangor.

pakatan cij parliament pc 131108 charles santiago According to him, besides giving 72 percent of Puncak Niaga contracts through direct negotiations instead of open tenders, Syabas had also in its capacity expenditure been purchasing pipes from a company in Indonesia, rather than government certified companies.

He said this showed a major violation of agreement and it lacks governance as the shareholder (Puncak Niaga) was directly involved in awarding the tenders.

"According to an audit report done by the National Audit Department which was revealed through the media, there are about RM352 million discrepancies between the contracts awarded in 2005, 2006 and 2007," he said, adding that Syabas has not given all its documents to be reviewed by the department.

Furthermore, Pua explained that the investment analysts (who have been commenting on the offer) have been using a "discounted cash-flow model" which provides significantly higher valuation for the companies.

"However, the model is just a technical term for paying the concessionaires future profits, which in itself is a totally unreasonable proposition and defects the purpose of the government's water restructuring exercise," he said.

"If we were to acquire McDonald's today, it would be fair to put value to its future profits as it is wholly an enterprise.

"However we are acquiring government concessions in this case - which means the government should not be paying for future profits for licenses and rights which it had itself granted," he added.

Pua said the minister should exercise his 'wide-ranging powers' under the Water Industry Services Act (2006) which provides that the minister's decision taken in view of national interest is final and cannot be appealed, reviewed, quashed or questioned in any court.