Tuesday, March 18, 2008

Selangor water plans hit shares of concessionaires

Selangor water plans hit shares of concessionaires

STOCKS of water concessionaires fell yesterday after Selangor proposed to provide free supply of water of up to 20 cubic metres per month to residents and also to review water supply agreements.
In addition, Aseambankers, in a report yesterday, said there is a "rising risk premium" for water concessions in Selangor.
Shares of Puncak Niaga Holdings Bhd fell 7.9 per cent to close at RM2.80 yesterday.
Puncak owns 70 per cent of Syarikat Bekalan Air Selangor (Syabas), which distributes water to end-users in Selangor. The rest of the company is held by Kumpulan Darul Ehsan Bhd.
The selling also spilled over to other water-related stocks like pipe maker JAKS Resources Bhd, which fell 12.3 per cent to 53.5 sen, and Taliworks Corp Bhd.
Taliworks shares fell nine per cent to close at RM1.99 yesterday.
Analysts said the free water concession for Selangor residents may involve a potential annual revenue loss of RM11.4 million for Syabas.
Aseambankers is unsure if Selangor can review agreements for the treatment and distribution of water since the law was changed in 2005.
"We would note that water matters relating to downstream treatment and distribution are now under the purview of the federal government, and no longer the state governments, after the Parliament in January 2005 approved the Federal Constitution Amendment Bill.
"It remains to be seen whether the new Selangor state government (on its own) has a case to review all past agreements involving water concessions in the state," said Aseambankers.

Selangor to review water pact, MB wants papers on deal declassified: SHAH ALAM: The Selangor Government will review the agreement signed between the state and Puncak Niaga Holdings Bhd which allows the company to operate, manage and maintain the Sungai Sireh water treatment plant in Tanjung Karang. Mentri Besar Tan Sri Khalid Ibrahim said the agreement, signed on March 7, seemed lopsided and would profit Puncak Niaga more than it would the state government or the people of Selangor. “I have only glanced at the agreement and it needs to be studied properly before a decision can be reached,” he told reporters at his official residence yesterday. Khalid said he had asked the state legal adviser to write to Puncak Niaga and asked that the papers be declassified so that they could be reviewed. The agreement was being questioned because it was signed after the state assembly was dissolved and one day before polling. -- MORE http://www.thestar.com.my/news/story.asp?file=/2008/3/18/nation/20675156&sec=nation

Selangor to review water agreement with Puncak Niaga: SHAH ALAM (March 17, 2008): The new state government will review the agreement made between Puncak Niaga Sdn Bhd, Syarikat Bekalan Air Selangor (Syabas) and the previous administration following a detection of imbalance in the figures of revenue handed to the state and the people. Newly sworn-in Mentri Besar (MB) Tan Sri Abdul Khalid Ibrahim said according to his calculations, he detected some irregularities in the agreement and has asked the state legal adviser to write in to Puncak Niaga to declassify the documents. – MORE http://www.sun2surf.com/article.cfm?id=21095

Selangor govt to review water pact: SHAH ALAM: The Selangor government will declassify and review the water treatment plant agreement signed recently between Puncak Niaga Holdings Bhd and the previous state government. Menteri Besar Tan Sri Abdul Khalid Ibrahim said the state legal adviser had been told to write to the company on the matter.Khalid said he was not happy with the revenue-sharing arrangement. – MORE http://www.nst.com.my/Current_News/NST/Tuesday/National/2189647/Article/index_html

Khalid announces free household water and lopsided water deal: In his first Press conference as Selangor Mentri Besar today, Tan Sri Khalid Ibrahim made two key announcements: the first 20 cubic metres of water is free to all Selangor households from April, and the eve of polling day water treatment plant deal between Puncak Niaga Holdings Bhd and Selangor Government is lopsided to the concessionaire’s advantage. The free water concession would be discussed first by the Exco before it could be implemented but it was to fulfill a PKR election campaign promise, he said. “This could be achieved if cost was lowered so that revenue was channeled back to consumers,” he said. “To achieve this, review of all water agreements are expected.” Khalid said the state legal adviser had been told to write to the company to declassify documents as his calculations showed that profits derived from water revenue was more to their advantage. “There is imbalance in the revenue given to the State and the people. It can only enrich the concessionaire” he told a Press conference at his official residence here for the first time. – MORE http://www.nst.com.my/Current_News/NST/Monday/Frontpage/20080317164615/Article/index_html

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