Putrajaya has failed to keep its end of the bargain under last week's MoU.

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Don’t back Langat 2, Selangor told

FMT Staff

 | March 11, 2014

Tony Pua says Putrajaya has failed to keep its end of the bargain under last week's MoU.

PETALING JAYA: The Selangor government is no longer obliged to support the Langat 2 water treatment project, according to Petaling Jaya Utara MP Tony Pua.

He said this followed private water concessionaires’ rejection yesterday of the Shah Alam administration’s takeover offer.

In a press statement commenting on the concessionaires’ failure to meet yesterday’s deadline for accepting renewed acquisition offers from Shah Alam, Pua said: “The Selangor state government no longer needs to grant all the additional approvals required by Langat 2 for land rights, access permissions and other permits.”

Puncak Niaga Sdn Bhd, Syarikat Bekalan Air Selangor (SYABAS) and Syarikat Pengeluar Air Selangor Holdings (SPLASH) told Bursa Malaysia yesterday they had rejected Selangor’s offers, which were consequent to the memorandum of understanding signed by the Shah Alam and Putrajaya administrations.

The state owned company Kumpulan ABASS has accepted the Selangor offer.

SPLASH rejected the offer outright. Puncak Niaga and its subsidiary SYABAS said they were willing to consider the offer subject to conditions which Pua described as “unreasonable”. These conditions included:

• A return on equity of 15% instead of 12%;

• Full payment of the disputed compensation for keeping water tariffs at levels set by the state;

• Rejection of international arbitration in the event of disagreements over appropriate return of equity.

Pua urged Putrajaya to honour its commitment to exercise its powers under the Water Services Industry Act (WSIA) to acquire the water companies.

Till then, he said, Selangor should should exercise all its legal powers to deny licences required by federal agencies for Langat 2.

“The Selangor state government shows its goodwill and willingness to cooperate with the Federal Government to resolve the critical water crisis by signing the MoU last week, witnessed by the Prime Minister Najib Tun Razak,” he said.

“Selangor has even agreed to immediately approve the development order for the construction of the Langat 2 water treatment plant project while all other required approvals such as land rights, access permissions and other permits shall be granted within 30 days of signing the MoU.

“Looks like the Federal Government has failed to cajole these concessionaires into accepting the above offer and BN government has failed to live up to its end of the bargain.”