Gamuda says planning Selangor water takeover

Gamuda says planning Selangor water takeover

KUALA LUMPUR, March 24 — Gamuda said today its 40 per cent-owned unit Splash is planning a US$3.26 billion (RM11 billion) offer for the water assets of Selangor.

Splash has informed the federal government and the Pakatan Rakyat-led Selangor state government that its offer could “bring a closure to the more than three years impasse faced by the water services industry” in Selangor, Gamuda said in a statement.

Under the offer, Splash plans to maintain water tariffs in Selangor at the current levels, with annual increases of two to three per cent, said Gamuda.

Splash will ask for a 30-year water concession after the takeover, it said.

“Upon the takeover, Splash will be solely in charge of the operations and maintenance of all the plants, including the operations of the water distributors,” it said.

Selangor privatised its water treatment services in the late 1990s to three companies, namely Puncak Niaga Sdn Bhd (PNSB), Konsortium Abass Sdn Bhd (Abass) and Splash. It also privatised the water distribution operations to Syarikat Bekalan Air Selangor Sdn Bhd (Syabas).

Puncak Niaga owns 70 per cent of Syabas.

The privatisation resulted in the state’s water industry becoming fragmented, with too many firms facing huge capital outlays to upgrade ageing infrastructure.

In 2006, the federal government announced plans to restructure the country’s water sector by injecting water assets in all states into a federal agency which will then lease the assets out to private sector players.

The restructuring hit a snag in Selangor after offers by the state government to buy out the water assets were rejected by some of the water operators due to pricing disagreements. — Reuters