Source: New Straits Times | Wednesday March 12, 2008
By : Francis Fernandez

KUMPULAN Darul Ehsan Bhd (KDEB), the investment arm of the Selangor state government, expects the RM9 billion Pahang-Selangor water transfer project to proceed as planned.

"We expect the project to continue as it is beneficial to consumers, providing access to affordable water;" said its general manager of corporate communications Necia Abdullah.

She added that KDEB has done most of the preparatory works, while the respective state governments have form­alised the supply agreement.

In November, Pahang agreed to supply water to Selangor at 10 sen per cubic meter of raw water, with rates to be reviewed every five years.

KDEB, which is also the country's largest water company, will be able to commence "immediately" on works for its portion of the job, said Necia.

In January, KDEB was given the letter of award to build and operate the Langat II water treatment plant in Ulu Langat that will receive raw water from Pahang.

The contract is worth RM2.5 billion, and will be passed down to KDEB's main listed vehicle Kumpulan Perangsang Selangor Bhd.

There are concerns that the fresh political landscape in the country's most industrialised state may affect the project.

The concerns aren't unfounded, as there were alternatives views. Some parties had suggested for the intake of raw water from the Perak River or Lake Kenyir, with pipelines following the existing railway track at a cost of about RM741 million.

Others favour replacing old and leaked pipes, because as much as 40 per cent of Selangor's water is lost due to busted pipes.

Meanwhile, Business Times was told that the possible takeover of Puncak Niaga Holdings Bhd by KDEB and contracts like the supply of pipes for Langat 2 may be reviewed.

JAKS Resources Bhd, which has an agreement with KDEB to supply and replace water pipes in Selangor, had been tipped to secure a lion's share of the job.

JAKS' niche is in government or government linked company projects, underpinned­ by its 10 year exclusive pipe supply contracts in Kedah and Malacca.