Puncak Niaga Holdings Bhd (PNHB) has threatened to pull out of a deal with state owned Pengurusan Air Selangor Sdn Bhd after the latter missed its fifth deadline to fulfil its contractual obligations.

 

In a press release last night, PNHB executive chairperson and managing director Rozali Ismail ( photo ) said there is now a sixth and final extension, with the new deadline falling immediately after the month of Ramadan in mid-July.

 

"We hope there is no more delays... If it is still not resolved, PNHB will have no choice but to pull out of the deal with Air Selangor in accordance to the law.

 

"In addition, (PNHB subsidiaries) PNSB and Syabas will revive their legal action to pursue RM4.97 billion owed by the Selangor government for not raising water tariffs, as stated in the concession agreement," said Rozali.

 

This had affected the company's cash flow which disrupted PNSB and Syabas' operations.

 

Air Selangor - a Selangor government company - had signed papers in November last year to acquire water assets from PNHB, in a complicated deal brokered by Putrajaya.

 

In March, talks almost broke down with both Selangor and Putrajaya accusing each other of violating terms of the contract, which hitherto been kept from public scrutiny.

 

On May 20, Putrajaya announced that a new deal has been struck and with both sides pledging to fulfil their contractual obligations in 60 days .

 

On Selangor's part, the state would have to expedite the issuance of necessary approvals for permits and land required for the Langat 2 water treatment plant and its distribution systems.

 

In 2006, Putrajaya passed the Water Services Industry Act (WISA) in a bid to consolidate water assets in the country under a single government agency.

 

However, the Selangor government had resisted on grounds that the existing concession with PNHB was lopsided.

 

This prompted Selangor to attempt to acquire PNHB's assets first in order to restructure the company before it is handed to Putrajaya.