Umno's Rozali threatens to call off water deal

PETALING JAYA - Puncak Niaga Holding Bhd (PNHB) has threatened to terminate the Selangor water deal after it received a request yesterday from Pengurusan Air Selangor Sdn Bhd for a sixth extension to the sale and purchase agreement (SPA) involving the two.

In a strongly worded statement, PNHB's executive chairman and managing director Tan Sri Rozali Ismail said the group sincerely hopes there will be no more extensions beyond the fasting month that will begin on June 18, as it "will be left with no choice but to invoke its legal rights to rescind the SPA and sue the state to recover its debt.

In May, Minister of Energy, Green Technology and Water Datuk Seri Maximus Ongkili had said that the federal and state governments had agreed to resolve matters within 60 days. That timeline should be up about the same time as Rozali's ultimatum.

He said both PNHB's wholly owned subsidiaries, Puncak Niaga Sdn Bhd (PNSB) and Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), has put on hold their respective legal suits to recover the outstanding debts that had ballooned to RM4.97 billion as at March 31, 2015 , pending completion of water restructuring exercise.

He said both PNSB's and Syabas's cash flows and operations had been severely constrained due to the high accumulated debts not paid over the years.

Puncak Niaga had agreed to sell its unit Puncak Niaga Sdn Bhd and 70%-owned Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) to Air Selangor for RM1.55 billion on November 11, 2014.

The transfer of water assets, has been extended several times to enable the pending issues of the water transfer between between the Selangor state government and the Federal government to be resolved.

The latest stop date being the fifth extension of time of the SPA, was due yesterday.

"To date, we understand that Air Selangor is still not able to fulfill the conditions precedent in the SPA and there may be a further extension (sixth extension) of the stop date before the proposed disposals can be completed to facilitate the Consolidation/Restructuring of the Selangor Water Industry to be managed by the State Government of Selangor via its state-owned entity, Air Selangor.

He said amidst the uncertainly as to when the water consolidation exercise can be concluded, PNHB will be seeking its board of directors' decision to consider a sixth extension of the stop date under the SPA.

Rozali said the delay in the completion of the water consolidation by the federal and state government has inadvertently resulted in severe repercussions and inconvenience to its consumers, of their rights to treated water "as the authorities have been using the phrase "Wait for restructuring!" repeatedly without any hesitation when PNSB and Syabas initiate any programme that is able to improve the level of services for the consumers.

"This scenario has been ongoing since 2008 and has not seen the light of day till today," he said.