Government to bear RM17 billion for Selangor water restructuring

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Energy, green technology and water ministry secretary-general Zaini Ujang says the government invested over RM10 billion to provide water infrastructure in Selangor from 2010 to 2018.

PUTRAJAYA: The federal government will bear the overall cost of approximately RM17 billion through Pengurusan Aset Air Berhad (PAAB) to finalise the water supply restructuring exercise in Selangor.

Energy, green technology and water ministry secretary-general Zaini Ujang said the cost would also cover the acquisition of Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH).

He said the investment would enable domestic and industrial water users in Selangor to access about 99% of clean water at a low domestic rate of RM0.57 for the first 20 cubic metres.

“Although the Selangor water restructuring exercise has not been finalised, the federal government invested more than RM10 billion to provide water infrastructure in the state from 2010 to 2018,” he told a press conference here yesterday.

Zaini said a change in the Selangor government’s policy since 2008 had affected the implementation of several high-impact water supply projects when the restructuring exercise had yet to be finalised.

This resulted in the people of Selangor being denied their rights to have access to clean water from the huge investment of the federal government, he said.

“One of the most affected projects was the RM3.7 billion Langat 2 Water Treatment Plant (LRAL2) which was supposed to be fully completed last year. A change of state government’s policy will cause the project to be completed in 2022 (instead).

“If the restructuring exercise is expedited, the mitigation investment of around RM800 million for the construction of the Semenyih 2 and Labohan Dagang plants need not be implemented.”

Zaini said he expected the water crisis in Selangor to worsen if the state government refused to carry out the migration process to the new system, which must be implemented in July.

To date, he said, the Selangor government via its wholly-owned subsidiary, Pengurusan Air Selangor Sdn Bhd (AiS), had yet to state its agreement. Deliberation over the migration process had been delayed for more than a year, he added.

“If the state government does not implement the migration process, there will be more implications such as the LRAL2, which can accommodate 1,130 million litres per day (MLD), being unserviceable. The restructuring (exercise) is necessary to ensure the quality of water supply at a competitive tariff rate,” he said.

Zaini brushed off allegations that the federal government was responsible for the maintenance of all water assets in Selangor, as AiS will be responsible for the operation and maintenance of the assets after the restructuring is finalised.

He also denied allegations that the federal government was not capable of developing water assets as the capital expenditure (capex) for states which had implemented the restructuring plan was funded by PAAB.

Zaini said PAAB’s financial position was now AAA-rated and it was able to offer capex financing at a competitive rate compared to commercial loans by state governments or operating companies.

The current PAAB financing model is worth more than RM14 billion and capable of financing up to RM40 billion, he added.