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Saturday, July 26, 2014

Rafii grills Khalid: Why pay RM1.63 BIL to Syabas & Puncak Niaga when both already nearly BANKRUPT

Rafii grills Khalid: Why pay RM1.63 BIL to Syabas & Puncak Niaga when both already nearly BANKRUPT
PKR's Rafizi Ramli  today hit out at the Selangor government over the failed water restructuring plan, questioning the need for the administration to compensate concessionaires Syabas and Puncak Niaga with RM1.63 billion to acquire them although both companies are almost bankrupt.
The Pandan MP claimed that Selangor had increased the compensation to both the concessionaires, owned by Umno crony Tan Sri Rozali Ismail, by RM568 million in March from its original offer RM1.07 billion in February.
In addition, the government would also take over the RM4.06 debt under the Puncak Niaga group, which includes Syabas which handles the water pipe system and water processing plant Puncak Niaga.
"After the people of Selangor have suffered for years with a water problem, which was mainly caused by the weakness of Syabas and Puncak Niaga, Tan Sri Rozali Ismail will now receive a huge reward to be borne by the people of Selangor," he said in a statement.
Rafizi Ramli
"To me, this move is no different from Barisan Nasional's decision to write off Tan Sri Tajuddin Ramli's (former chairman of Malaysia Airlines) RM600 million debt.
Rafizi, who is PKR strategic director, said that if both Syabas and Puncak Niaga were valued according to the usual method using the asset worth, liabilty and the companies' profits, they would be of zero value.
"This means that if Puncak Niaga group were to be sold in an open market without negotiations, its value – based on profit records, assets and liabilities – would be nothing.
"However, the memorandum of understanding (MoU) would give them a profit of RM1.63 billion, which is RM1.7 billion more than its market price," he added.
In March, Selangor Menteri Besar Tan Sri Khalid Ibrahim signed a water restructuring deal with Putrajaya, allowing the state government to reverse decades of privatisation of the Selangor water industry.
According to the agreement, the Federal government will give the state power to take over the management of treatment plants and distribution pipes from four private companies, including Syabas and Puncak Niaga.
At that time, it was reported that Selangor would offer RM9.65 billion to the shareholders of the four companies to take over their shares and debts.
However, Khalid came under fire from his own party for signing the deal, with many PKR leaders criticising him for not consulting them about it.
Rafizi had previously warned that Selangor would be forced to fork out RM20 billion in the water deal and the people of Selangor could be seeing higher water tariffs in the future.
He said that the deal inked on February 26 did not benefit the people of Selangor as at the end of the day, they could be forced to pay higher prices for water because of the MoU which the state had signed with Putrajaya.
MB Khalid
He said the RM20 billion price tag was arrived at by adding the cost of taking over the four companies in charge of Selangor's water industry, which could be between RM9.65 billion and RM14 billion, and the cost of building the Langat 2 water treatment plant, which is at least RM8 billion. – TMI

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