Charles Santiago

Posted: 25 Apr 2011 07:45 PM PDT

Source: Free Malaysia Today

Tarani Palani | April 25, 2011

It will cost the public, says new think tank.

KUALA LUMPUR: A newly registered research group today presented its model for the restructure of the Selangor water services industry, saying the state's plan was flawed and would be costly to the public.

It called for greater cooperation between Shah Alam and Putrajaya in resolving the issue.

The Association of Water and Energy Research Malaysia (AWER), which was registered early this year, said it spent six months studying the issue and would present its report to Members of Parliament.

The report says that Selangor seems to be pushing for a transfer of pipes worth nearly RM8.2 billion to the Pengurusan Aset Air Bhd, a federal special purpose vehicle that funds the development of water and sewerage infrastructure.

However, it adds, the people of Selangor, Kuala Lumpur and Putrajaya have already paid for these pipes and the transfer will double their liability.

Speaking to FMT, AWER president S Piarapakaran said this would be the worst-case scenario and that the leasing of the pipes was a detail that the federal and state governments had to iron out.

The restructure of the Selangor water industry is deadlocked by disagreements between the state, the federal government and the four companies supplying water to Selangor, Kuala Lumpur and Putrajaya.

One of the four suppliers, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), wanted to raise tariffs by 37% in January 2009 but has not been able to do so because of opposition from the state government.

Shah Alam has said it is important that the state take over the entire water industry so that the public would receive cheap and good quality water.

The AWER report casts doubts on the state's promise of limiting the tariff increase to 12%.

"According to SPAN (National Water Services Commission), water tariff increase is estimated to be within 20%," the report says.

Meanwhile, Charles Santiago, the coordinator of Coalition Against the Privatisation of Water, said that the pipes were a technical issue and could not used to distract from the bigger matter at hand, which is the management of water.

"They (AWER) are saying that (the pipes should be considered as) sunk cost but that is not how you do accounting. They are assets of the states and they should be accounted for," he told FMT.