Water issue - RM456mil compensation a year (ext: Starbiz)

With less than a week to the deadline to wrap up the water consolidation deal in Selangor to avoid a tariff hike, the tussle between the federal and state governments is still unresolved.

Selangor Water Review Panel member Tony Pua said talks were still ongoing between the state and the federal government but, at this juncture, it remained a stalemate.

It was reported earlier that Pengurusan Aset Air Bhd (PAAB), the party tasked to take over all the states’ water assets nationwide, had concluded the asset and liability verification exercise by its auditors for Selangor and the revised numbers were recently sent to the federal government for approval.

“It is now up to the federal government to make a formal offer to the four concessionaires,” the brokerage said. Earlier reports had estimated PAAB’s offer for the water assets to be about RM5bil.

An analyst from a bank-backed brokerage said due to the state’s interest in the four companies, it could influence the decision to opt for the federal government’s offer. “But Syabas is still entitled to its compensation and the state would be the one slapped with it. How long can it bear the cost if this is prolonged?” he said.

The compensation was reported at about RM38mil per month and RM456mil a year.