Mar 25, 2009

Air di Selangor (Catatan 1)

3 Reasons why the Federal Government must not take over

1. You will pay higher rates for water
  • No more Free Water for 20m3 Policy
  • Increase in water tariff
  • If State Government takes over, it will lower water rates
  1. Current rate is RM1.33/m3
  2. By 10% in 2009 to RM1.33/m3
  3. By 20% in 2011 to RM1.18/m3
  4. By 25% in 2013 to RM1.11/m3
  • Continued poor quality of water poor service under Syabas

2. It is a backdoor Bail-out

  • Federal Government will bail-out its cronies who are deeply in debt
  1. Puncak Niaga’s debt: RM1.3 billion
  2. Syabas’ debt: RM2.9 billion
  3. Splash’s debt: RM1.6 billion
  4. Abbas’ debt: RM640 million

TOTAL DEBT: RM6.4 billion

  • Federal Government will pay extremely high prices to concession companies for their assets
  • Money is taken from the masses and given to the already rich
  • Corrupt practices will continue in the way it has

3. Syabas will profit despite bad track records

  • Syabas is the monopoly distributor of water in Selangor and Kuala Lumpur
  • Federal Government will give the monopoly operating license to Syabas
  • Quality of water has deteriorated tremendously water smells bad and is filthy
  • Poor response to water problems
  • No open tenders for more than 72% of contracts worth RM600 million
  • We pay RM50 for water reconnection fees, compared with RM10 in the past before privatisation
  • More than RM325 million in discrepancy was found between the summary contracts awarded in 2005, 2006, and 2007 and Syabas’s review document
  • Between 2005 & 2007, Syabas exceeded its ceiling of contract value by RM200 million
  • RM51.2 million was spent to renovate the Syabas office when the Selangor Water Regulatory Department (JKAS) only approved RM23.2 million for this in 2005
  • Under Syabas’ agreement, 25% tariff hike is scheduled for 2012, followed by a 20% hike in 2015, a 10% in 2019 and a 5% hike on 2021, 2024, 2027 and 2030
  • The Executive Chairman of Puncak Niaga Holdings Berhad was paid RM5.1 million Director’s Fees in 2007 (RM425,000 a month!) one of the highest Director’s Fees in Malaysia
  • He is also Executive Chairman of Syabas, 70% of which is owned by Puncak Niaga
  • Pipe scandal:
  • Purchase of pipes from Indonesian companies of RM600 million
  • These companies are also owned by the same person above!
  • Why did the Federal Government give a handout of RM2.9 billion in grants and loans although Syabas is privatized?
  • Syabas is the only monopoly distributor of water in Selangor and Kuala Lumpur
  • Despite bad track records, the Federal Government will continue to give the monopoly operating license to Syabas

Water is a fundamental human right and should not be transformed into a profitable commodity. Governments have a responsibility to realise this right. By paying concession companies sky-high prices, the Federal Government is privatising profits and socialising losses