To Deputy Energy, Green Technology, and Water Minister Mahdzir Khalid, the disputed land which caused the cancellation of the Selangor water deal between the federal government and the state, is collateral.

This is in exchange for the RM2 billion grant from the federal government to the state for the buy over of Selangor's water concessionaires last year.

"We give the money, RM2 billion, so we need collateral (worth) RM2 billion...the land is collateral," he told reporters at a press conference in Kuala Lumpur today.

Yesterday Selangor Menteri Besar Azmin Ali ( right ) said the state's water deal with Putrajaya was called off because the federal government asked for state land "for free" .

Energy, Green Technology, and Water Minister Maximus Ongkili however said the land would only be leased for 45 years.

He added Azmin had misunderstood the terms of the master agreement signed September last year.

When asked what the land would be used for, Mahdzir answered with an anecdote.

"The land is under your name, and I build a house on your land, the house is mine but actually it belongs to you.

"Because under the national land code.. Anything that is built on the land belongs to the owner," he quipped.