Federal Government To Assume Control Of Water Operators, Licensee In Selangor

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KUALA LUMPUR, April 8 – The federal government has agreed to invoke Section 114 of the Water Services Industry Act (WSIA) 2006 to assume control of all four water concession companies and the licensee in Selangor. Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili said the decision was made to ensure the security and sustainability of water supply to the people of Selangor, Kuala Lumpur and Putrajaya. The decision was made by the Cabinet during its weekly meeting last Friday (April 4), he said a statement, in Kuala Lumpur, Monday. Ongkili said the federal government did not wish to allow the protracted negotiation on the water industry restructuring between the Selangor government and the concessionaires as well as the on-going water supply crisis plaguing the three regions to cause the people and the national economy to suffer.

He said the invocation of the said section of WSIA was conditional on both the federal and Selangor governments signing a Heads of Agreement in respect of the water industry restructuring, financial facilitation and completion of the Langat 2 project. The condition is stipulated in the memorandum of understanding (MoU) signed by both parties on Feb 26 this year. The ministry has been mandated by the Cabinet to decide on the commencement date of the invocation. The four companies are Syarikat Bekalan Air Selangor (SYABAS), Puncak Niaga Sdn Bhd (PNSB), Konsortium Abbas Sdn Bhd (Abbas) and Syarikat Pengeluar Air Selangor Holdings Bhd (Splash). According to the National Water Services Commission (SPAN), up to March 31, 2014, a total of 821 project applications in Selangor, Putrajaya and Kuala Lumpur had to be put on hold as adequate water supply could not be guaranteed.

In SHAH ALAM, Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim said he had been informed on the invocation of Section 114 of WSIA by Ongkili via a letter dated April 4. Abdul Khalid said the federal government, through the letter, had also asked that the state government speed up the approval for the stalled Langat 2 and the mitigation projects. “At a brief meeting with the minister (Ongkili) on April 4, I was also told that the process to gazette Section 114 had started. “I was given the draft agreement between the federal and Selangor governments with regard to the MoU signed on Feb 26 to resolve the water restructuring issue,” Abdul Khalid said in a statement. The state government, he said, believed that its cooperation with the federal government would ensure the success of the water industry restructuring.

Through the MoU, the Selangor government will issue the approval for the federal government’s construction of Langat 2 and its distribution system (LRAL2) in the state. In addition, the federal government is prepared to inject funds to assist the Selangor government in taking over the water concessionaires and to allow for the water supply services in Selangor to be managed through a state government-owned company.

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