Selangor water assets revamp to miss deadline

PETALING JAYA: Analysts don't see the long-drawn-out Selangor water assets restructuring concluding in October, despite assurances given by Pengurusan Air Selangor Sdn Bhd (Air Selangor).
Gamuda Bhd is expected to continue to defend its stance that Syarikat Pengeluar Air Selangor Sdn Bhd (Splash) be valued at RM3 billion, and analysts are less optimistic about ongoing negotiations for the takeover of Splash by Air Selangor.
"I think the water issue will continue to drag for some time, it's difficult to see a good solution," an analyst who declined to be quoted told SunBiz.
At RM250.6 million, the offer price for Splash would result in a divestment loss of RM920 million for Gamuda, which owns a 40% stake in Splash.
Another analyst said the valuation requested by Gamuda is benchmarked against the other three water assets, therefore it is justifiable.
He, however, opined that while the government could be willing to increase the offer price, he doubts the quantum of increase would be favourable, given the wide gap between the offer price and the expected price.
"How significant (would the) price increase (need to be) that can satisfy Gamuda?" he asked.
Gamuda did not respond to a request for comment.
Kumpulan Perangsang Selangor Bhd (KPS) has agreed to the offer for its 30% stake in Splash. The Sweet Water Alliance Sdn Bhd, controlled by businessman Tan Sri Wan Azmi Wan Hamzah, has rejected the offer for its 30% interest in Splash. It is not known if he has changed his mind since.
The one-year grace period for the renegotiation of the master agreement between the Selangor government and the water concessionaires will end on Oct 7.
Splash is the last pending water asset under the Selangor water restructuring exercise. Puncak Niaga Sdn Bhd (PNSB), Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) and Konsortium Abbas Sdn Bhd (Abbas) sold their water assets for RM2.47 billion, RM3.11 billion and RM990 million, respectively.
Even though the deadlock is expected to continue, an analyst said it is unlikely to cause the invocation of Section 114 of the Water Services Industry Act, which allows for the compulsory acquisition of the asset.
"They (the government) want an amicable solution. So they might increase the offer price and in case they maintain the price, they may set a favourable condition for Gamuda," he opined.
Energy, Green Technology and Water Minister Datuk Seri Maximus Ongkili, however, has not taken the invocation of the Act off the table, having previously said it is an option to resolve issues with Splash by Oct 7.