The Selangor government is confident that the RM9.65 billion price tag to takeover the state's water concessionaires will not balloon, said Selangor's Menteri Besar Incorporated (MBI) chief executive officer Faekah Husin.
 
Responding to concerns raised by Kelana Jaya MP Wong Chen that the option for international arbitration may allow the water concessionaires to demand more that the valuation amount, Faekah said such fears were "unwarranted" and "misguided".
 
Wong was referring to a clause included in the memorandum of understanding (MOU) signed between the state and federal government which will see Selangor takeover water services from private concessionaires in exchange for consent of the federal government's Langat 2 water treatment plant.
 
"The concern over the possibility that the international arbitration would result in a bigger tab for the state government is unwarranted and misguided as the state took into consideration all possible scenarios with their associated risks leaving no stone unturned when it agreed to sign the MoU.
 
"The state government has always been confident that its equity valuation – a return of 12 percent per annum – can withstand international scrutiny. Until recently, this confidence has never been questioned," Faekah said in a statement today.
 
Faekah, who is former political secretary to Selangor Menteri Besar Abdul Khalid Ibrahim, stressed that the MOU was above board and all its contents were as discussed in public before.
 
"The state government is confident that the MOU would enable to expedite the restructuring of Selangor's water industry in line with the Water Services Industry Act 2006...
 
"...which is an essential process to ensure world-class water services at reasonable tariffs, reduce non-revenue water (NRW) that has shot up to a whopping 33 percent while continuing with the free first 20 cubic metres water programme," she said.
 
Kumpulan Darul Ehsan Berhad (KDEB), which is the state government's vehicle for the water takeover, comes under MBI.