– shall not exceed the amounts stipulated in their concession agreements
The Selangor water concessionaires’ rejection of the latest offers by the Selangor government on Monday bringing once again the attempted restructuring of the state’s water industry to a standstill after nearly 5 years of negotiations. This was despite the optimism of a breakthrough given the signing of a Memorandum of Understanding (MOU) between the state and federal government over the issue.
Hence, Pakatan Rakyat welcomes with open arms, the statement by the Minister of Energy, Green Technology and Water, Dr Maximus Ongkili which gave the Federal Government commitment that it will use the Water Services Industry Act (WSIA) to forcibly restructure the industry.
In fact the statement itself is historic as it was the first time a Federal Government Minister conceded that it will invoke the Clauses 114 and 191 of WSIA to compulsorily acquire these privatised water companies. Members of Parliament from Pakatan Rakyat – Dr Dzulkefli Ahmad, William Leong, Charles Santiago and myself had since February 2009 pleaded to the then Ministers in charge of Water to exercise their powers under the Act, but to no avail.
While the agreement to use the above Clauses may have come 5 years late, causing much anxiety and suffering to the Selangor residents, it is better late than never. In fact, this is the only way to expedite the restructuring of the industry as the privatised water companies were only interested in maximising profits as shown by rejecting 5 offers made in good faith by the state government.
However, before the rakyat in Selangor can celebrate, we await with bated breath the actual execution of the above clauses. In addition, we would like to remind to the Federal Government that the compulsory acquisition must not be an excuse to make excessive compensation to these concessionaires.
The relevant compensation amounts must be derived from the formulas which are defined in the concession agreements in the event of buy back by the Government. Based on our estimates, the value of compensation could be as low as RM6.3 billion but not exceeding RM7.6 billion highlighted by Selangor Menteri Besar, Tan Sri Khalid Ibrahim yesterday.
The BN Federal Government must not at any point compensate these concessionaires for “loss of future profits” which is not provided for any where in the privatisation agreements. In fact, the BN government must not forget that the lower the cost of acquisition, the lower it will be for water tariffs in Selangor, Kuala Lumpur and Putrajaya, benefitting a population of 7.3 million people.
Finally, we would like to gently remind the Federal Government that time is of the essence in the above matter. If the Federal Government is to drag their foot over the takeover exercise, it is well within the powers and legal rights of the state government to withold all remaining necessary approvals for the Langat 2 project to proceed.
We look forward to a positive and beneficial cooperation between the state and federal government in the interest of the rakyat over the water industry.
***Joint Media statement by Rafizi Ramli, Tony Pua and Dr Dzulkefly Ahmad on Thursday, 13 March 2014 in Kuala Lumpur
