SHAH ALAM: Pengurusan Air Selangor Sdn Bhd (Air Selangor) denied allegations that the Selangor state government paid 10 times the value of Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH), following its takeover.
It’s Chief Executive Officer Suhaimi Kamaralzaman, said the allegation by former Mentri Besar, Tan Sri Abdul Khalid Ibrahim was not true, as the value of SPLASH was not RM250 million.
“The figure (RM250 million) was obtained based on the rate of returns of 12 per cent on its share investment which was done when the concession agreement kicked-off in Jan 2000 and until Dec 31, 2012. This was minus the dividend, which was paid beforehand.
“The figure which was offered to the shareholders of SPLASH was made in 2013. Based on the SPLASH financial statement which was audited, its net book value as of March 31 stood at RM1.84 billion.
"The RM250 million offer made in 2013 was done so at an 86 per cent discount to SPLASH’s net book value," he said in a statement, here, today.
Last Wednesday, NSTP reported that Abdul Khalid had claimed that SPLASH's purchase value of RM2.55 billion was too high compared to his offer of RM250 million previously.
He attributed the acquisition as being a burden to the people which was likely to be seen through an increase in water tariffs.
However, Selangor Menteri Besar Amirudin Shari explained that the existing water tariff will remain unchanged but would depend on the state's finances.
Suhaimi explained that the acquisition of SPLASH was based on the principle of 'willing buyer, willing seller', where the seller and the buyer must come to an agreement before the acquisition is finalised.
"Over the past five years, the shareholders rejected the proposal to sell SPLASH at RM250 million due to a huge discount on SPLASH’s net book value.
"Due to a five-year delay in the takeover of SPLASH, the backdated arrears for treated water stood at
at RM4.7 billion, so in April, SPLASH began legal proceedings to recoup the outstanding arrears," he said.
Suhaimi also said that RHB Investment Bank which was appointed by the state government had valued SPLASH at RM2.5 billion based on the net book value method as of March 31, 2015.
"The independent Federal government appointed appraiser, Deloitte, also confirmed an acquisition cost of RM2.7 billion was reasonable and fair.
"Ernst & Young also said that the net book value of SPLASH on March 31, 2017 was at RM2.8 billion, Hence the value of RM2.55 billion offered was lower than the certified value," he said.
Suhaimi also said Air Selangor rejected allegations that SPLASH was granted a special privilege, as a
higher discount was used for the acquisition compared to the discount in the acquisition of Puncak Niaga (M) Sdn Bhd (PNSB) in 2015.
"Among the benefit’s involved in the takeover of SPLASH was the completion of the water service industry restructuring. This comprised bonds and loans involving the four water concessionaires amounting to more then RM8 billion which will be acquired by Pengurusan Aset Air Berhad (PAAB) and restructured as rental lease payments.
"The state government debt to the Federal Government which exceeds RM1.1 billion for various water-related projects will also be restructured in the form of rental lease payments.
"All concession agreements granted to private companies will be terminated and there will be no multiple profits enjoyed by concessionaires such as SPLASH.
"The base supply rate for treated water by SPLASH which is now at RM1.37 per cubic meter (m3) will drop to a more reasonable rate of between 42 and 44 sen m3," he said.
Suhaimi said the completion of the water services restructuring exercise will also provide opportunities for better financing terms for capital expenditure (CAPEX) projects.
This would be financed by PAAB through the lease method for 45 years which would be lower than commercial loans.
"In addition, water-related water projects such as dams would be financed by the Federal Government through grant allocation.
"These benefits cannot be enjoyed without a resolution to SPLASH's takeover," Suhaimi said.