Source: The Star | Tuesday March 18, 2008
By : Dharmender Singh

SHAH ALAM: The Selangor Government will review the agreement signed between the state and Puncak Niaga Holdings Bhd which allows the company to operate, manage and maintain the Sungai Sireh water treatment plant in Tanjung Karang.

Mentri Besar Tan Sri Khalid Ibrahim said the agreement, signed on March 7, seemed lopsided and would profit Puncak Niaga more than it would the state government or the people of Selangor.

“I have only glanced at the agreement and it needs to be studied properly before a decision can be reached,” he told reporters at his official residence yesterday.

Khalid said he had asked the state legal adviser to write to Puncak Niaga and asked that the papers be declassified so that they could be reviewed.

The agreement was being questioned because it was signed after the state assembly was dissolved and one day before polling.

State secretary Datuk Ramli Mahmud, who signed the agreement, later explained that the matter had been decided on about a year ago and was effective April 1, but the signing of the agreement had been delayed until this year.

On the offer of free water for usage of up to 20 cubic metres in Selangor, Khalid said that it was only a matter of examining the calculations for the water tariff and finding ways to reduce the cost per unit of usage.

“We can then take the money saved and pass it back to the people by way of free water,” he said.

That way, the state government need not pay subsidies to the water distribution concessionaire Syarikat Bekalan Air Selangor (Syabas), according to him.

Khalid had earlier announced that Selangor consumers would enjoy free water for usage of up to 20 cubic metres starting in April.

Meanwhile, investors' concerns about the review of the Sungai Sireh water treatment agreement saw Puncak Niaga's share price tumbling 24 sen to RM2.80 yesterday, the lowest since December 2006, on the back of falling global markets.

Analysts said the review signalled a change in the state government policy over water concessions and this could affect the overall restructuring of water assets throughout the country.

They also said that Puncak Niaga might not be able to secure a government grant arising from a delay in a hike in the water tariffs.

Khalid later met with representatives from state subsidiaries Kumpulan Darul Ehsan Bhd, Selangor State Investment Corporation and State Economic Planning Unit at his office.

The three-hour long briefing was meant to keep him informed of the operations of these organisations.

Khalid will meet with representatives from Selangor Development Corporation (PKNS), Selangor Agriculture Development Corporation and Permodalan Negeri Selangor Bhd (PNSB) today.