With the federal National Water Services Commission (Span) intervening and with the Malaysian Anti-Corruption Commission targeting Selangor MB Khalid Ibrahim, is it any surprise then that the private water concessionaires have rejected the Selangor government’s offer for the takeover of water assets?
The interventions of these two federal-level commissions came just before the expiry of the Selangor government’s 20 Feb deadline for the offer to be accepted by the water concessionaires.
Abbas and Splash have now turned down the offer. Puncak Niaga too. From the point of view of these concessionaires, why accept the Selangor government’s offer when they know that its position has been weakened by the actions of federal bodies – and when they know there could be a more attractive offer elsewhere?
Instead of backing the Selangor government’s offer (valuing the assets based on book value), Span has just thrown a lifeline to the water concessionaires who are seeking a much higher valuation (based on discounted cash flow or future profits).
Guess who ends up ultimately footing the bill in the form of higher water tariffs (perhaps 30 per cent or more from April)?