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Corporate  |  FEBRUARY 8, 2013 9:59AM

Chin: Accusation of Government bailout of Syabas is nonsense

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syabas-logo-thumbnialBernama – Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui has described the accusation by DAP National Publicity Secretary Tony Pua that the federal government had bailed out Syarikat Bekalan Air Selangor (Syabas) to the tune of RM3.41 billion as nonsense.

In denying Pua’s “twisting of facts”, Chin said as far as the water industry was concerned, the federal government had never bailed out any party but it had an inherent duty to take care of the people, especially on the crucial issue of adequate water supply.

“As far as its use by the rakyat and for the development of the country are concerned, it is the federal government’s top priority. That’s why you have a ministry that is dedicated to (the issue of) water,” he told Bernama in an interview at his office here.

Pua said on Monday that the additional RM120 million allocations for upgrading water facilities announced by Prime Minister Najib Abdul Razak last week had further pushed the amount of bailout funds from the federal government to RM3.41 billion in just four years.

Chin said the federal government had never taken over the bonds issued by Syabas along with three other concessionaires – Puncak Niaga, Syarikat Pengeluar Air Sungai Selangor (Splash) and Konsortium Abass. Instead, what it did was, to buy over on a “willing buyer, willing seller” basis from the bondholders, which comprised some leading corporate institutions.

And this was done solely because of the failure of the present Selangor government to pay compensation to Syabas as provided for under the concession agreement, which in turn caused problems to Syabas in paying for the purchase of treated water from Puncak Niaga, Splash and Konsortium Abass.

Chin explained that due to this, the bond issuers could not fulfil their obligation to pay dividends to bondholders who, prior to 2008 when the Pakatan Rakyat took over the Selangor government, had been getting good dividends.

The federal government’s intervention had eased concerns in the bond market while protecting the interests of bondholders and more importantly, the security of water supply.

“Should there be a default, the bond holders can resort to taking legal action which eventually will disrupt water supply.

“When you have a situation concerning water security for use by the rakyat and for the development of the Klang Valley, which is our most developed region, and the economy, we cannot do anything to jeopardise this. The federal government has been committing and will be committing its resources to ensure that water security is there,” Chin emphasised.

He said the federal government’s move was not a bailout because it did not in any way free the four concessionaires from their financial obligations as bond issuers.

“Tony Pua’s allegation is going too far. It’s twisting of facts certainly. I hope that he will not keep on repeating it because it is not truthful.”

On the RM120 million allocations that the prime minister announced, he stressed that was absolutely necessary because the Selangor government was consistently blocking efforts by Syabas to upgrade water facilities to meet rapidly increasing demand.

This allocation for upgrading works, as in all expenditure on water related operations throughout the country, will be monitored by National Water Services Commission (SPAN).

If the federal government had not come in, there would be insufficient funds to allow certain facilities to be maintained and upgraded, and to prevent Selangor, Kuala Lumpur and Putrajaya from experiencing water shortages.

Last month’s water shortages faced by some 500,000 people in parts of the Klang Valley could be repeated and this was not something that the federal government would want to see happening again.

The minister reiterated the source of the recent water disruptions was basically the Selangor government’s persistency in disrupting the capital expenditure (capex) needed by Syabas in accordance with the provisions of an agreement.

“That is very clear, whatever is needed to upgrade facilities on capex, the Selangor government is obstructing such expenditure by Syabas.”

Chin said, had the Selangor government adopted a cooperative and reasonable attitude towards the federal government to ensure water security, the most densely populated and most developed part of Malaysia would not have suffered from insufficient water supplies as experienced recently.

“It’s such an anomaly. Both the Selangor government and federal government must work together on this essential service. Water is such an important aspect of any country’s development.

“From my very first day in office as minister, I have made the issue of water security as my top priority,” he said.



 
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