Thursday, June 2, 2011

Penang leading the way in developing a mature working relationship with Fed gov

June 02, 2011

Najib (centre) watches as Lim (left) and Datuk Seri Peter Chin shake hands after the signing of the new water deal between Putrajaya and Penang, June 2, 2011. — Picture by Jack Ooi
PUTRAJAYA, June 2 — Prime Minister Datuk Seri Najib Razak said today the restructuring of the Penang water assets was an achievement in federal-state collaboration and hoped other opposition states would follow suit. This comes after Penang Chief Minister Lim Guan Eng said yesterday that the water restructuring agreements demonstrate the commitment of the Pakatan Rakyat Penang government towards a mature working relationship with the Barisan Nasional federal government.
“Penang is the first opposition state to sign a water restructuring agreement and I hope it will be a catalyst for water asset restructuring deals in other opposition states,” he said at the signing of the restructuring of Penang water services here today.
“The signing today represents the pinnacle in achievement of the efforts that have been carried out by the federal government and the Penang state government for the well-being and benefit of the public.”
The federal government said last week it was eager to take part in Selangor’s proposed discussions over the restructuring of water assets in the state.
The chief executive of the national water asset management company Pengurusan Aset Air Berhad (PAAB), Datuk Ahmad Faizal Abdul Rahman, also said in a press conference today that talks with governments of the states of Pahang, Terengganu, Kelantan, Kedah and Selangor were at the “advanced” stage.
“We hope we can get Kedah next as we already have Perlis and Penang and that will take care of the northern region,” he said.
The states which have already signed water restructuring agreements with PAAB are Malacca, Negri Sembilan, Johor and Perlis.
Under the deal signed today, Penang agreed to the migration of its core assets in Perbadanan Bekalan Air Pulau Pinang (PBAPP), in exchange for a complete restructuring exercise of the outstanding federal loans owed by the state.
The terms of the agreement are as follows:
  • Penang’s outstanding loan of RM655.24 million to the federal government will be converted into a grant;
  • Penang will be given a grant allocation of RM1.2 billion for the expansion project of Mengkuang Dam;
  • The federal government will be fully responsible for the source work of water supply projects;
  • The state government will be relieved of the financial burden to develop and upgrade water supply assets;
  • PBAPP can focus solely on providing water treatment and distribution services and concentrate on achieving operational efficiencies, good quality water and services;
  • PBAPP can work towards full cost recovery and financial independence in the long term;
  • Any revision or variation in water tariffs must obtain the approval and consent of the Penang state government.
In a separate statement, ACQUA SPV Bhd announced it was confident of acquiring the remaining bonds related to the Selangor water concessionaires within this week.
The company, a special purpose vehicle established by PAAB, had on May 31 announced that it had successfully acquired 99.6 per cent of the bonds amounting to RM5.8 billion from existing bondholders of Syarikat Bekalan Air Selangor (Syabas), Syarikat Pengeluar Air Sungai Selangor (Splash), Puncak Niaga Sdn Bhd and Viable Chip Sdn Bhd under seven different bond programmes.

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