Friday, March 06, 2009

The water issue..

Got this off Tricia's blog. I thought it gave some insight to what actually is happening regarding the water issue.


“Water, Water Everywhere and not a drop to drink” is the quote most often in my head these days. No, I haven’t been obsessing about Coleridge’s “Ryme of the Ancient Mariner”, but have been rather involved in the water restructuring issue in Selangor recently.

It’s actually a water fight, more like it. The Edge has a good report here.

Although it’s the financial and business news that’s been reporting on it mainly, I think the issue is beginning to take ground amongst the main papers and some blogs. Which is good because this is going to affect ALL consumers in Selangor and Kuala Lumpur.

What is happening and why is it so important? In short, the Selangor water industry is in the midst of getting restructured. All this needs to be resolved by end of March or there will be a 31% tariff increase.

The original plan was for the Selangor State Government to negotiate with the concession companies to buy them over. But before the offer expired, the Federal Government stepped in and announced it would negotiate directly with the concession companies because the State was taking too much time. They have sidestepped the State completely and this amounts to sabotage.

This is really bad news for us all because:

  1. The Federal Government will be dealing with their crony companies Syabas and Puncak Niaga behind closed doors. More shady wheeling-dealing that has been going on for too many years.
  2. The Federal Government will offer a higher price for the companies’ assets (compared to the State’s offer) and this is actually a Backdoor Bail-Out because they are heavily in debt today.
  3. There will be a tariff increase in water as opposed to the State which is fighting to ensure NO tariff increases at all.
  4. The Federal Government will most likely continue to use Syabas as a licensed operator and we all know how bad the quality of water and services is today - just think about the quality of water you are receiving today at home…

There have been a lot of silly statements coming from the Federal Government recently, and it’s tough because it can be a media perception war. And we all know what/who controls the media.

For example, the Minister of Energy, Water and Communications said that they took the lead in negotiations for other states and were only “allowing” the Selangor State Government to take the lead. This is rubbish, because Water is a state affair. Please read the Federal Constitution. Water is listed under the Ninth Schedule as being a matter of the State. See here.

Also, the decision to allow the State to lead negotiations was a Cabinet directive. Unless this decision has been revoked (which has not taken place), the State still has the mandate to be involved. Third, it is contravening the Water Services Industry Act 2006 if the State is excluded completely from these negotiations. Obviously, the State Government HAS to be involved - it is ridiculous to exclude the State from any decisions on water.

This exercise is an admission of the failure of privatisation. The Government privatised water, made the people lose out, and now in the de-privatisation process wants to benefit and prosper the rich crony companies yet again. Once bitten, twice shy, the saying goes. The people are wiser than that.

CEO of Puncak Niaga Tan Sri Rozali Ismail was reported to have received RM5.1 million in 2007 as Director’s Fees. He claimed that “one must be willing to pay for a professional”. As far as I know, he is a lawyer and has had little experience in the water industry, much less a major international player.

The bottomline is this: the Federal Government cannot bail out these crony companies. For the sake of the people whose taxpayer’s money will go to filling these greedy little pockets, this backdoor bailout should stop.

Water, tolls, highways, hospitals, sewerage, and so on… all these are public utilities that should never have been privatised in the first place.

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