Air Selangor to operate as sole water supplier for Selangor, KL and Putrajaya from April 1

PUTRAJAYA (Jan 4): Air Selangor has completed the take over of four concessionaires and will operate as the sole water supplier in Selangor, Kuala Lumpur and Putrajaya from April 1 this year.

Water, Land and Natural Resources Minister Dr A.Xavier Jayakumar said the acquisitions of water concessionaires Puncak Niaga (M) Sdn Bhd, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) and Konsortium ABASS Sdn Bhd (Abass) were implemented since the end of 2015, while the take over of Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) was done in August last year.

“With this restructuring exercise fully finalised, Air Selangor will be the sole operator of water treatment and distribution services, and will focus fully on improving the effectiveness and efficiency of the said services,” he said.

Jayakumar was speaking to reporters after witnessing the signing of the Third Supplementary Agreement to the Principal Agreement on the Restructuring of the Water Services Industry for Selangor, Kuala Lumpur and Putrajaya, here today. Selangor Menteri Besar Amirudin Shari was also present.

The first and second supplementary agreements were signed on July 10, 2017, and Sept 21, 2017, respectively.

According to Jayakumar, Air Selangor will be regulated through the National Water Services Commission (SPAN) under the Water Services Industry Act (Act 655). SPAN will also play a role as an educational centre for water use, water resources, and conservation.

Asked whether restructuring process could be completed by the stipulated date, Jayakumar said: “There will not be any delay, there should not be any hiccups as everything has been settled, the amount has been agreed.

“We have also got approval from the Cabinet for Pengurusan Aset Air Berhad (PAAB) to buy over the assets from SPLASH and then lease it out back to Air Selangor.

“So all the paper work has been done and the approvals are on the table. We just need to go through the process of having the business model signed and the old assets to be handed over to Air Selangor on April 1. We are confident.”

Jayakumar said Air Selangor had also planned capital expenditure (Capex) of RM30 billion over a 30-year period beginning this year, to improve the water services system for than 9.1 million people.

“Through this restructuring, Air Selangor will operate ‘asset light’, which means Air Selangor will no longer be burdened with the responsibility of obtaining finances to develop water assets, and only lease water assets from PAAB by paying rental at competitive rates, “he said.

Jayakumar said four States, namely Perlis, Pahang, Terengganu and Kedah still have to finalise the restructuring of their water supply services, and they were unlikely to be done by this year.

Meanwhile, Amirudin said the cost of acquiring SPLASH was fully borne by Air Selangor, with RM1.9 billion financed through funds channelled by PAAB, and the remaining RM650 million would be paid in installments over nine years.

On the financing obtained from PAAB, the repayment would be made through long-term lease payments over 45 years.

“In addition, the bonds and loans owed by the concessionaires amounting to more than RM8 billion will also be taken over by PAAB and it will be restructured into the long-term lease.

“Water-related loans obtained by the state government from the Federal Government amounting to about RM1.1 billion will also be restructured into the long-term lease, which will have a positive impact in improving the state’s financial position,” Amirudin said.

Asked on how the Capex would be financed, he said it was based on a strategic operations plan set up to meet the requirements.

“The plan to finalise the restructuring of water services in Selangor, Kuala Lumpur and Putrajaya is not easy and the migration process of the whole structure had begun since 2006-2007. It has involved four menteris besar, three state secretaries and three ministers,” he said.

He also assured the Selangor State government, through Pengurusan Air Selangor, was committed to providing efficient, effective, competitive and sustainable water supply services to safeguard the interests of consumers.- Bernama

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