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Gamuda Berhad (29579-T) • Annual Report 2012
WATeR suPPlY
Regrettably, during the year, very little progress was
made in consolidating selangor’s water industry
despite several years of protracted negotiations.
Although the Federal Government indicated
several months ago that a fresh offer would be
made to acquire our water assets, no such offer
was forthcoming during the year.
it remains unclear when and how, this stalemate
can be resolved. in the meantime, treated water
continues to be produced by our 40% - associate
company syarikat Pengeluar Air sungai selangor
sdn Bhd (sPlAsh) and three other players - Puncak
niaga sdn Bhd, Konsortium ABAss sdn Bhd and
Konsortium Air selangor Bhd. The treated water is
in turn purchased by syarikat Bekalan Air selangor
sdn Bhd (sYABAs), selangor’s sole distribution
concessionaire, and distributed to consumers
in selangor and the Federal Territories of Kuala
lumpur and Putrajaya. The dispute between the
selangor state Government and sYABAs revolves
around the implementation of a scheduled
consumer tariff increase which has been frozen
since 2008. The state Government has rejected the
tariff hike claiming that sYABAs had failed to meet
its obligations under its concession agreement.
The delay in implementing the scheduled tariff hike
has resulted in sYABAs being unable to fully pay
the water producers for the treated water supplied.
This had impacted the cash flows of the water
producers and raised the risk ratings of some of
the outstanding water bonds of these producers.
To stave off the risk of potential bond defaults,
the Federal Government, through Acqua sPV (a
special purpose vehicle) successfully acquired all
of selangor water industry bonds in exchange for
new Federal bonds.
At the time of writing, the stalemate has escalated
further. The state Government, in response to
sYABAs’ request for approval to commence water
rationing, exercised its right to step-in to take over
the management and operations of sYABAs. The
Federal Government, however, has yet to approve
the state’s takeover of sYABAs.