Selangor MB Khalid Ibrahim says the federal government recognised that its water privatisation policy had failed; so it introduced a restructuring of water management under which a federal body would take over the water assets and lease them back to the operators in the various states.
In Selangor, the state government owns about 70 per cent of the water assets with the remainder held by private companies. The assets owned by the state are valued at RM9 billion. The state government values the private sector’s assets and imputed equity at RM5.7 billion. (The assets alone are valued at RM4.6 billion though the federal government has valued them at RM5.0 billion).
The critical issue now is to what extent the federal government will step in to assist the private concessionaires in meeting their considerable liabilities and debt obligations.
The water negotiations are crucial. If the state succeeds in taking over the assets at a fair price (to the rakyat, that is), it would set a precedent that could be used to nationalise the highways as well.