Federal Govt will not invoke Water Services Industry Act as yet

KUALA LUMPUR: The federal government will not invoke the Water Services Industry Act 2006 (Wasia) as yet but will take over the water production and the management of assets if the Selangor government and water concessionaires do not firm up a deal soon.

Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili said he still had a “glimmer of hope” that the state and concessionaires would reach a deal, but noted that time was running out.

“The Government is preparing to invoke Section 114 of the Wasia since negotiations have failed thus far. But right now, we are still facilitating without invoking if possible ... but the (water) situation is getting bad,” he explained to reporters in Parliament.

The water concessionaires, he said, would still be compensated should there be a takeover, stating that “fairplay and justice still applies”.

Section 114, he said, gave the federal government via the minister (Ongkili) the power to “take over water production and the management of water assets in the name of national interest”.

While Ongkili said there was no specific timeline on when the Section would be invoked, he said they wanted to do it as “fast as possible”, given the current dire water situation.

“There is water rationing everywhere. Reservoir levels are very low. It is going to be crazy.”

According to the Act, the minister can direct the National Water Services Commission to assume control of the property, business and affairs of a licensee, and carry out the whole or part of the licensee’s business and affairs or appoint others to do so.

The Selangor government, Ongkili added, would still be able to continue negotiations under a “willing buyer-winning seller” basis even if Section 114 was invoked.

“The Act says control of production and assets. The Attorney-General is refining those points at the moment before we gazette.”

Ongkili said the finalisation of the water restructuring exercise should take place within three months from March 10, which was the deadline given by the Selangor government to water concessionaires to accept the deal.

Ongkili pointed out that they were not taking over the assets but managing them. “The point of the memorandum of understanding (MoU) is to facilitate the state (Selangor) to achieve the results,” he added.

On the MoU, Ongkili said subsidiary agreements would be signed soon, including on Langat 2.

However, he said the subsidiary agreement on the water restructuring exercise could not be signed as yet due to the price rejection by certain concessionaires.

“In the meantime, the Government will finalise its operation for the invocation of Section 114.

“The situation is in dire need of cooporation without any particular party losing what is the basic rights to them,” he added.

Concessionaires, he added, could opt for international valuation to ensure their assets are properly valued.

“I do not think anyone wants to forgo the value of their assets.

“That is why we said you make an offer to them, if they are not happy, get an independent auditor to do a valuation or even go for international arbitration.

“But some of the concessionaires do not even want to agree to a due diligence and international arbitration. What is there to hide?” he asked.

The initial offer by the Selangor government, Ongkili said, was to give a price. And if the concessionaires agree in principle, then to carry out a due diligence and get an international assessment.

“If they (international auditing firm) say it (the compensation) should be more, then I pay you more. If they say it is less than what I am offering, then I will still give you my offer, but they did not take it.

“But now, the Selangor government have changed their mind. They say yes, you can go for international valuation and if it is higher, I will pay but if it is less than my offer, I will take their offer,” said Ongkili, who opined that this was due to a breakdown in negotiations.

“I am still hopeful something will happen.”