Selangor Journal

SPLASH postponed another six months pending Federal Government’s decision

SHAH ALAM, MAR 30: The water concession takeover involving Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) has been delayed for another six months, pending results from an international independent valuer, as requested by the Federal Government.
Dato’ Menteri Besar, Dato’ Seri Mohamed Azmin Ali said the State Government received the written notice on March 14.
He said, the Federal Government informed that the postponement period is until this October 5.
“Based on that, the delay to finalise the water industry restructuring is not State Government’s fault.
“It is due to Federal Government’s postponement to enable the ministers to get an actual value from an international independent valuer,” he replied to Bukit Gasing Assemblyman R Rajiv’s question.
At the same time, Mohamed Azmin said, Air Selangor bore RM3.7 billion in operational cost from bulk water rates and monthly fixed cost to SPLASH, until December 31, 2016.
“The State Government is not incurring any cost due to this delay, however it puts pressure on Air Selangor from those two rates and they continue to increase every month.
“Nevertheless, Air Selangor will ensure the financial constraint is managed well for the sake of consumers and not to burden citizens,” he said.
He said, the State Government would like to urge the Federal Government to expedite the takeover to ensure transparency and openness.
Meanwhile, Mohamed Azmin had also rejected R Rajiv’s recommendation to apply the ‘expropriation clause’ method to end SPLASH’s concession.
According to Mohamed Azmin, by using that method, compensation cost as of March 31, 2015 would increase to RM4.9 billion.
“Compared to the cost of taking over SPLASH’s equity, this cost is higher.
“Based on this method, the State Government would need to pay operational cost based on water bulk payment rate and the fixed monthly rate in arrears to SPLASH besides paying for its assets and paid-capital as stated in the concession agreement.
“Therefore, the State Government is not planning to apply this method as it will burden the citizens. In our negotiation, the Federal Government has agreed to fund the SPLASH acquisition process through its equity,” he said.

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