Three water concessionaires in Selangor who passed up a takeover offer of RM9.65 billion by the state government now stand to get some RM2 billion less, as the exercise forges ahead.

"Following the rejection (of the offer) by the concessionaires, the overall payment to (them) is estimated to be reduced by RM2 billion," tweeted Menteri Besar Abdul Khalid Ibrahim today.

"The state only has to pay RM7.65 billion. Water Services Industry Act 2006 (WSIA) will be enforced on the concession companies."

The savings accrue because the state government is no longer purchasing equity at 12 percent per annum, non-compounded, on a willing buyer-willing seller basis, he told a press conference.

Under Section 114 of the WSIA, the state government will now take over by paying the companies a total of about RM7.65 billion for water assets.

Khalid had signed a Memorandum of Understanding (MOU) with Putrajaya on Feb 26, which gave all four companies a new deadline of March 10 to accept the offer

When the deadline expired, three companies - Puncak Niaga Sdn Bhd, Syarikat Bekalan Air Selangor (Syabas) and Syarikat Pengeluar Air Selangor Holdings - rejected the offer.

The only one to accept it was the state government's subsidiary, Kumpulan Abass.

In a statement issued later, Khalid said he now expects the federal government to enforce the takeover of the three companies at a lower payout.

"The concessionaires are now subject to Section 114 of the WSIA and this will have a positive impact on the state government and the people of Selangor," he said.

The savings will be channelled toward improving water services for more than seven million users in Selangor, Kuala Lumpur and Putrajaya, he said.

The state will renew efforts to reduce non-revenue water with new metering systems, replace existing pipes with fibre optic options and set up better detection of leaks in the underground distribution system.

In response to criticism of his secrecy over the terms of the MOU, Khalid said he has declassified the document, access to which was restricted by the Official Secrets Act.

"The MOU is now under the jurisdiction of the Selangor state assembly," Khalid said.

"Members of the public who are interested to sight the document may now make a request under the Freedom of Information Enactment. However, the MOU cannot be reproduced in any form."

'Over-compensation concerns'

Meanwnhile, PKR director of strategy Rafizi Ramli, who is part of a special Pakatsn Rakyat committee on the water deal, said the panel had communicated to Khalid to reduce the compensation after the concessionaires rejected the takeover offer and the menteri besar had responded to it.

Rafizi said invoking WSIA will force a compulsory takeover of water infrastructure by the federal government from the concessionaires, similar to a nationalisation. It i. a double-edged sword.

On the plus side, all compensation will be footed by the federal government instead of the state government, he said.

But he added that on the down side, the compensation value is now totally determined by the federal government to deliberately overcompensate the concessionaires, then when the federal government leases the water infrastructure back to Selangor, it will naturally be at a higher cost.

“Therefore the element of the public campaign has to continue (to ensure no over-compensation) because now the prerogative is with the federal government and the state government has no control,” he told journalist at the Parliament lobby today.

He added that now, with the Pakatan water committee, there is better communication with the Selangor government and more oversight as the deal moves forward.

He added that the committee expected to receive documents on the deal from the state government by this week and will soon arrange a meeting with Khalid.