Published: Thursday March 14, 2013 MYT 7:26:00 PM

RM120mil allocation to Syabas is not a bailout, says SPAN chief

KUALA LUMPUR: The federal government's RM120mil allocation is meant for upgrading works on water plants and pump houses in Selangor and not for bailing out Syarikat Bekalan Air Selangor (Syabas), according to National Water Service Commission (SPAN) chairman Datuk Ismail Kassim.

He said 11 pump houses in the state were being upgraded. The last time such works were done was about 30 years ago and each pump house could only operate for 12 hours a day.

"With rapid development, the operation of pump houses had to be extended up to 22 hours a day. This means that the existing system is no longer capable of meeting the demands of water from both domestic and industrial users.

"So, there is no issue of a Syabas bailout because the allocation is actually very small. Aid is always given in terms of capital expenditure. So, the perception that the allocation is meant to bailout Syabas is absolutely untrue."

He was responding to an Opposition allegation that the allocation announced by Prime Minister Datuk Seri Najib Tun Razak last January was meant to bailout Syabas. Ismail said that the issue of capital expenditure for Selangor was different compared to Johor, Malacca, Negri Sembilan, Perak and Penang as these states had opted for the new water service regime where it was borne by the federal government through Permodalan Asset Air Berhad (PAAB).

"Until the state government opts for the new regime, capital expenditure and other matters will remain the state government's responsibility. This only happens in Selangor because there is a concession agreement between the state government and Syabas.

"In other states, only water treatment plants are privatised, while the delivery or distribution of water is controlled by state government-owned companies," he said.

He also said the Selangor government should approve the Langat 2 water treatment plant project to overcome water issues in Selangor, Kuala Lumpur and Putrajaya.

The project was proposed as a long-term solution to meet the Klang Valley's burgeoning water needs for the next 20 years.

Ismail said SPAN, was the water service industry's governing body, and if Syabas failed to operate accordingly, action could be taken against it.

"This includes controlling the license and daily monitoring of its production to ensure the water it produces is safe for consumption," he said.

Ismail said Syabas had done a good job so far in terms of productivity, work procedure and account management, based on monitoring activities carried out by SPAN. - Bernama

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Published: Thursday March 14, 2013 MYT 7:26:00 PM

RM120mil allocation to Syabas is not a bailout, says SPAN chief