Source : Malaysian Insider
By Shannon Teoh
The information flows like water… Selangor Menteri Besar Khalid Ibrahim in his own press conference in Parliament explains why his government has grievance with the federal government stepping in without being asked to, in negotiating with water concessionaires in Selangor.
KUALA LUMPUR, Feb 19 - The Selangor state government claims that the National Water Services Commission (Span) is pandering to private concessionaires in the ongoing dispute over the restructuring of water supply in the state.
Menteri Besar Tan Sri Khalid Ibrahim told reporters in Parliament today that Span’s chief executive officer Datuk Teo Yen Hua’s decision yesterday to negotiate with the four concessionaires directly was “mischievous”.
“Teo appears now to be pandering towards the interest of private concessionaires,” he said.
Khalid and members of the Selangor water review panel who were present, questioned the motive of the federal government in wanting to take over the transfer deal despite Teo insisting that water tariff would be kept low after acquiring the assets directly without the state’s involvement.
“Is our offer too high that they must come in to get a lower price? If not, then how does a higher offer translate into lower water tariffs?” Tony Pua (DAP-Petaling Jaya Utara) said.
“But if he feels he can negotiate a lower price, then tell us and we will support you,” Khalid said.
Teo had yesterday declared that the government has waited too long for the state government to buy over assets of the four concessionaires because of pricing issues.
This comes amid criticism by analysts and the media that Selangor’s offer was too low and would not be accepted by concessionaires.
The Malaysian Insider understands that an RM5.7 billion offer is on the table to take over Puncak Niaga, Syabas, Abass and Splash, which will include the assets, such as treatment plants, dams and pipelines.
Under the Water Services Industy Act, all water assets in Peninsular Malaysia must be transferred to Pengurusan Aset Air Bhd (PAAB), a unit of the Finance Ministry.
Khalid said that it is not up to Teo to decide on a matter of policy which involves the constitutional powers of the federal and state governments. Khalid has written to Minister of Water, Energy and Communications Datuk Shaziman Abu Mansor on the matter.
“The issue is the rights of the state government to restructure. An RM5 billion deal should not be rushed by ceasing the efforts to get a reply on the offer from the concessionaires which is due tomorrow, by replying on their behalf yesterday.
“Even if he wants to cancel our agreement after the 20th when negotiations on the offer can begin, it would be mischievous,” Khalid said of Teo’s decision on the understanding that Selangor would be given the right to execute the transfer of assets.
He claimed that this was decided in Cabinet on Jan 16 last year and said there was no new Cabinet decision to revoke this agreement.
Second round of talks likely for Selangor water deal
Source : Malaysian Insider
By Lee Wei Lian
KUALA LUMPUR, Feb 16 – A second round of talks between the Selangor state government and Puncak Niaga Holdings Bhd is likely, given the unattractive pricing offered for the latter’s water assets.
Last Friday, the Selangor state government made an offer to acquire the assets of two water concessionaires which are majority owned by Puncak Niaga.
It offered RM1.6 billion for Puncak Niaga Sdn Bhd assets and RM1.5 billion for Syabas assets. The offer is based on valuations as at Dec 31, 2007.
The offer also precludes the Selangor government from assuming any liabilities currently held by Puncak Niaga and Syabas.
“We see Puncak very likely rejecting this offer given the low pricing of this deal and come up with another round of talks with the Selangor state government,” says OSK Research.
“We premise Puncak getting a better deal in due course as its monopoly position in distributing water in Selangor, via Syabas, gives it the upper hand. We reckon there is more value to be captured in its valuation as its FY08 performance saw Puncak incurring a substantial sum in project development expenditure.”
OSK Research says that with a combined offer of RM2.2 billion excluding group equity value, the offer is lower than Puncak Niaga’s fixed assets and project development expenditure of RM3.9 billion as of FY07.
OSK Research adds that should the offer go through and the state government does not assume any of Puncak’s liabilities, Puncak will be sitting on a cash pile of RM3.9 billion on one hand and total long-term plus short-term borrowings of RM4 billion.
“This leaves nothing much at the net level,” says OSK Research.
The research house has downgraded the stock of Puncak Niaga to “take profit” from “trading buy” as it believes the market will react negatively to the unfavourable terms.
By Shannon Teoh
The information flows like water… Selangor Menteri Besar Khalid Ibrahim in his own press conference in Parliament explains why his government has grievance with the federal government stepping in without being asked to, in negotiating with water concessionaires in Selangor.
KUALA LUMPUR, Feb 19 - The Selangor state government claims that the National Water Services Commission (Span) is pandering to private concessionaires in the ongoing dispute over the restructuring of water supply in the state.
Menteri Besar Tan Sri Khalid Ibrahim told reporters in Parliament today that Span’s chief executive officer Datuk Teo Yen Hua’s decision yesterday to negotiate with the four concessionaires directly was “mischievous”.
“Teo appears now to be pandering towards the interest of private concessionaires,” he said.
Khalid and members of the Selangor water review panel who were present, questioned the motive of the federal government in wanting to take over the transfer deal despite Teo insisting that water tariff would be kept low after acquiring the assets directly without the state’s involvement.
“Is our offer too high that they must come in to get a lower price? If not, then how does a higher offer translate into lower water tariffs?” Tony Pua (DAP-Petaling Jaya Utara) said.
“But if he feels he can negotiate a lower price, then tell us and we will support you,” Khalid said.
Teo had yesterday declared that the government has waited too long for the state government to buy over assets of the four concessionaires because of pricing issues.
This comes amid criticism by analysts and the media that Selangor’s offer was too low and would not be accepted by concessionaires.
The Malaysian Insider understands that an RM5.7 billion offer is on the table to take over Puncak Niaga, Syabas, Abass and Splash, which will include the assets, such as treatment plants, dams and pipelines.
Under the Water Services Industy Act, all water assets in Peninsular Malaysia must be transferred to Pengurusan Aset Air Bhd (PAAB), a unit of the Finance Ministry.
Khalid said that it is not up to Teo to decide on a matter of policy which involves the constitutional powers of the federal and state governments. Khalid has written to Minister of Water, Energy and Communications Datuk Shaziman Abu Mansor on the matter.
“The issue is the rights of the state government to restructure. An RM5 billion deal should not be rushed by ceasing the efforts to get a reply on the offer from the concessionaires which is due tomorrow, by replying on their behalf yesterday.
“Even if he wants to cancel our agreement after the 20th when negotiations on the offer can begin, it would be mischievous,” Khalid said of Teo’s decision on the understanding that Selangor would be given the right to execute the transfer of assets.
He claimed that this was decided in Cabinet on Jan 16 last year and said there was no new Cabinet decision to revoke this agreement.
Second round of talks likely for Selangor water deal
Source : Malaysian Insider
By Lee Wei Lian
KUALA LUMPUR, Feb 16 – A second round of talks between the Selangor state government and Puncak Niaga Holdings Bhd is likely, given the unattractive pricing offered for the latter’s water assets.
Last Friday, the Selangor state government made an offer to acquire the assets of two water concessionaires which are majority owned by Puncak Niaga.
It offered RM1.6 billion for Puncak Niaga Sdn Bhd assets and RM1.5 billion for Syabas assets. The offer is based on valuations as at Dec 31, 2007.
The offer also precludes the Selangor government from assuming any liabilities currently held by Puncak Niaga and Syabas.
“We see Puncak very likely rejecting this offer given the low pricing of this deal and come up with another round of talks with the Selangor state government,” says OSK Research.
“We premise Puncak getting a better deal in due course as its monopoly position in distributing water in Selangor, via Syabas, gives it the upper hand. We reckon there is more value to be captured in its valuation as its FY08 performance saw Puncak incurring a substantial sum in project development expenditure.”
OSK Research says that with a combined offer of RM2.2 billion excluding group equity value, the offer is lower than Puncak Niaga’s fixed assets and project development expenditure of RM3.9 billion as of FY07.
OSK Research adds that should the offer go through and the state government does not assume any of Puncak’s liabilities, Puncak will be sitting on a cash pile of RM3.9 billion on one hand and total long-term plus short-term borrowings of RM4 billion.
“This leaves nothing much at the net level,” says OSK Research.
The research house has downgraded the stock of Puncak Niaga to “take profit” from “trading buy” as it believes the market will react negatively to the unfavourable terms.
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