Federal Government should freeze its RM250 million grant to Syabas for its Phase One of RM2 billion pipe replacement project in Selangor as well as review the 30-year RM12.73 billion Selangor/Kuala Lumpur/Putrajaya water privatization concession
(Parliament, Wednesday): Last July, Deputy Prime Minister Datuk Seri Najib Razak announced a review of “lopsided” privatization contracts which “short-changed” the government and the Malaysian public with a view to re-negotiate them. He said the government would learn from past mistakes and weaknesses to ensure that in future, it was not short-changed when negotiating deals with the private sector.
It is clear however that the government has not really learnt from its past mistakes and weaknesses in privatization, or the biggest privatization under the premiership of Datuk Seri Abdullah Ahmad Badawi - the RM12.73 billion Selangor/Kuala Lumpur/Putrajaya water privatization – would not have gone wrong right from the start.
This is why the concessionaire for the biggest water supply privatization project in the country, Syarikat Bekalan Air Selangor Sdn. Bhd (Syabas) has been served with a “show cause” letter by the Ministry of Energy, Water and Communications for violating the concession agreement by procuring pipes from Indonesia to replace ageing water pipes in the Klang Valley instead of sourcing them locally – only six months into the 30-year concession!
In fact, the Selangor/Kuala Lumpur/Putrajaya water supply privatization had gone wrong even before its conclusion on December 17, 2004, for it had scuttled the plans of the Minister for Energy, Water and Communications, Datuk Seri Dr. Lim Keng Yaik who announced in April last year the suspension of water privatization in all states pending the Federal Government’s review on how best to manage Malaysia’s water resources.
To use Keng Yaik’s very colourful language, “ Gone are the days that you (successful privatization companies) can run away with the cherry and leave us with the baby” and the “show cause” letter to Syabas by the Ministry of Energy, Water and Communications will be the acid test whether there are still companies which can “run away with the cherry leaving the baby” in new water privatization contracts signed after Keng Yaik has taken over the water ministry.
If the Federal Government really means business about no more “lopsided” privatization contracts which “short-changed” the Malaysian public, it should freeze its RM250 million grant to Syabas for its Phase One of RM2 billion pipe replacement project in Selangor as well as review the 30-year RM12.73 billion Selangor/Kuala Lumpur/Putrajaya water privatization concession.
As a first step, Keng Yaik should set the precedent of accountability and transparency by making public the 30-year RM12.73 billion Selangor/Kuala Lumpur/Putrajaya water privatization concession, which has already produced “a can of worms” in its first six months, with the Malaysian public and even the Minister himself in the dark about many things under the privatization concession.
Many question cry out for answer, such as:
Both these nominated companies are not only relatively unknown, they raise disturbing questions about the propriety of such last-minute distortion of the tender process by designating companies to be the obligatory suppliers, conflict-of-interest and the background of the designated companies, as Laksana Wibawa, Puncak Niaga and Syabas are believed to have a common factor in Tan Sri Dr. Rozali Ismail, who is executive chairman of both Syabas and Puncak Niaga.
Has the Ministry of Energy, Water and Communications released the RM250 million grant to Syabas for the first phase of the pipe replacement exercise without conditions?
Is Rozali telling the truth in that both the water privatization concession and the tender for the RM375 million Phase One of pipe replacement in the Klang Valley had specified that the winning contractor must be a bumiputra company? And if so, why did Syabas mislead the water industry in failing to mention this important condition in its tender invitation?
Keng Yaik as well as Syabas chief, Rozali should accept the invitation to the parliamentary roundtable on water privatization in Parliament on Friday to clarify these and many other questions and issues surrounding water federalization and privatization.
* Lim Kit Siang,
Parliamentary Opposition Leader, MP for Ipoh Timur & DAP
Central Policy and Strategic Planning Commission
Lim Kit Siang, Parliamentary Opposition Leader, MP for Ipoh Timur & DAP Central Policy and Strategic Planning Commission Chairman