The Selangor government has urged Bursa Malaysia to explain why Puncak Niaga Holdings Bhd, a key player in the state’s water services, was given a waiver from being categorised as PN17.

“Up until now, Bursa Securities have not satisfactorily explained the reasons for such a waiver being granted to Puncak Niaga,” read a statement from the press secretariat of the Menteri Besar’s Office today.

PN17, or Practice Note 17, is Bursa Malaysia’s classification for companies which are in financial distress which must submit proposals to the approving authorities to revive their status in order to remain listed.

Puncak Niaga and its subsidiary Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) have been part of a tug-of-war between the state and federal governments.

The state government is adamant that it be allowed to buy over the company in order for it to be restructured before allowing it to be federalised under the Water Services Industry Act 2006 (WSIA).

Keeping tariffs low

The Khalid Ibrahim administration had repeatedly argued that this move was necessary because Syabas’ performance had failed to meet the stipulations in the water concession agreement and refused to have its accounts audited .

However, Puncak Niaga, whose boss Rozali Ismail has strong links with Umno, has refused to budge.

Khalid’s press secretariat said that the the state government supports the implementation of WSIA because the law recognises the weaknesses of private companies in the delivery of quality water infrastructure and keeping tariffs low.

The secretariat states that although the previous administration was unwilling to hold Syabas to account, the current administration will not allow private companies to continue excessive profit taking.

“The state feels that by far the best and most workable solution to ensure quality water services to the rakyat of Selangor is to restructure the water services sector so that Water Asset Management Company (WAMCO) owns and builds water assets while the state, through a wholly-state owned company, operates the assets solely for the benefit of the rakyat,” it said.