theSun | MONDAY MARCH 2 2009
news without borders
the need for concessions.
– Savings from increased efficiency to go towards
research and development, including promotion of
technologies like rain water harvesting to address
anticipated future problems of water shortage in the
state.
– Cut back on excesses which include excessive lever-
aging of assets and huge dividend payout in 2008 in
anticipation of takeover, high allowances of RM5.1
million to Syabas chairman Tan Sri Rozali Ismail
despite RM2.9 billion debt and Syabas payment
of RM700,000 monthly management fee to parent
company Puncak Niaga since 2005.
– Wants federal government to cancel concession
agreement for several breaches to the terms.
– Wants minister to invoke power under Water Services
Industry Act to decide on move which is of benefit to
the public interest.
WHAT THE FEDERAL GOVT OFFERS
– Take over capital expenditure and assets (both from
the state (80%) and concession companies (20%))
and let the concession companies decide if they want
to continue operating as concessions or migrate to
the licensing regime.
– Asset-light model will allow concession companies
to continue operating without burden of loan repay-
ments for asset and asset depreciation costs.
– Compensation to companies if tariffs are reduced
could amount to RM38 million a month. By taking
over assets, federal government will lower burden of
companies with cash flow problems and high bond
repayments. This will still translate into tariff hikes but
lower than scheduled 31%.
– Federal government says all players, including the
state, will be included in negotiations.
agreements, the lid is still shut where Selangor’s
water concession agreement, signed between
the state, federal government and Syabas, is
concerned. An application for judicial review
to declassify the concession agreement by
the Coalition Against Water Privatisation in
Malaysia is still pending in court.
In addition, the excesses of the four conces-
sion companies, in particular the high annual
allowance of RM5.1 million paid to Syabas and
Puncak Niaga executive chairman Tan Sri
Rozali Ismail, the monthly RM700,000 manage-
ment fees Syabas pays to its parent company
Puncak Niaga and Rozali’s close ties with Umno
leaders have also come under scrutiny.
Questions have been raised over the pru-
dence of returning the concession or licence to
the concessionaires, despite the fact that they
have raked up a collective debt of almost RM6
billion. Also, audit reports have shown that
Syabas, in particular, had breached several
terms in the concession agreement.
As far as the state’s water review panel,
which has gone through the books is con-
cerned, PAAB taking over constitutes a
bailout of the bleeding companies which are
calling on the federal government to lick their
wounds.
In general terms, if PAAB takes over, peo-
Traffic summons arrives
– eight years late!
by Ng Kee Seng and Charles Ramendran
newsdesk@thesundaily.com
PETALING JAYA: Would you remember
where you parked your car at 12.45pm on
Jan 19, 2001? That is what the police want a
motorist to recall eight years after an alleged
traffic offence!
Banker Woo Ai Lin lamented: “Last
week, I received via registered mail a police
demand for driver’s particulars under Section
115 of the Road Transport Act 1987. There
was also an offer to settle a RM30 compound
for allegedly parking my car in an obstructive
manner on Jalan Jejaka.
“I don’t even know where is Jalan Jejaka.
Is it fair to expect me to remember where I
parked my car eight years ago?”
Woo told theSun that she was shocked
by Bukit Aman traffic police’s display of “ef-
ficiency”. She also said that the stated date of
issue on the reminder was March 30, 2009
which is more than a month ahead.
“They managed to serve me the notices
only after eight years to an address (in Subang
Jaya) where I have been residing for more
than 10 years without any change. Further-
more, after eight years, is the alleged offence
still valid?”
With all those questions, Woo said she
was still deciding whether to just settle the
7
ple living in Selangor will probably face hikes
at a lower rate than the initial scheduled
hikes up to 2035 but the bigger picture will
show that the cost of the lower hikes are to be
borne by all Malaysian taxpayers.
In a letter dated Feb 19, 2009 from Puncak
Niaga Sdn Bhd to the National Water Com-
mission Malaysia (Span), among the terms
proposed is for PAAB to take over its RM2
billion of loans and liabilities, that PAAB is to
absorb all costs in relation to workers affected
by the migration for concession to licensing
and that the interests of shareholders and
bond holders will be taken care of.
The state has therefore asked Energy,
Water and Communication Minister Datuk
Shaziman Abu Mansor to invoke his pow-
ers under the Water Services Industries Act
to back the state’s efforts to buy over water
assets of the four companies in the interest
of protecting consumers from further hikes.
Under the provisions of the Act, the minister’s
decision on the matter cannot be challenged,
appealed against, reviewed, quashed or ques-
tioned in any court.
However, this is a double-edged sword
because the federal government has raised
doubts that the state’s resources are enough
to afford the promised tariff reductions. Shazi-
man last week said the state would have to
compensate the concession companies some
RM38 million a month to reduce the tariffs.
He also questioned the price offered to the
concessionaires by the state which was way
below what the concessionaire pay the bond
holders.
“If the price offered is way lower than what
the concessionaire pays the bond holders,
I don’t think it will go through,” Shaziman
said. “If we are going to the capital market to
raise bonds, we cannot allow the confidence
of the bond-holders to be jeopardised; other-
wise, our plan of raising cheaper bonds will
not go through.”
Selangor Water Review Panel member
Tony Pua, however, said the companies have
excessively leveraged their assets.
“They have taken more loans and bonds
than necessary to operate these entities and
then, after facing problems paying these
loans, expect the state to rescue them.
“Our philosophy is that we will pay a rea-
sonable return on invested capital,” he said.
“They knew of the takeover following
the implementation of the Water Services
Industry Act and refunded all the cash to the
shareholders and left the bonds as they are;
so if you are looking at invested capital they
have taken all their invested capital back and
expect whoever comes in to pay their bonds.
This is very unfair. We need to take away the
returns taken, and if after that they find they
do not have enough to pay their bonds, then
the shareholders would have to be responsi-
ble, because the state is not responsible for a
bailout. The state is here to pay a reasonable
price,” added Pua.
compound or challenge the authenticity of
the alleged offence after a lapse of eight years.
And why after eight years?
“Of course, the simple way out is to just pay
and avoid all the hassle and inconvenience
of attending court. But there are questions
and principles over such demands (by the
police),” she added.
Contacted by theSun, federal traffic police
deputy chief ACP Mohd Fuad Abd Latiff said:
“The summons is valid even though it was
issued eight years ago.
“We usually send out reminders to the
registered address of vehicle owners when
summonses are issued without the presence
of the offender, such as in the case of speeding
and illegal parking, within weeks.
“If the offender or car owner fails to re-
spond to the reminders, then police will seek
the assistance of the National Registration
Department to verify the person’s updated
address, adding that the process is time con-
suming.”
In Woo’s case, Mohd Fuad urged her to of-
ficially write to him with copies of the postal
summons she received.
“We are unable to say now without look-
ing at the details but I give an assurance that
we will definitely get to the bottom of this
and keep her posted about the outcome of
our findings,” he said.