Posted: 09 Sep 2011 09:09 PM PDT
LACK OF PROGRESS IN THE PROPOSED RESTRUCTURING OF THE SELANGOR WATER INDUSTRY BY THE FEDERAL GOVERNMENT
The Selangor State Government is disappointed at the lack of progress in the proposed restructuring of the Selangor water industry and the reluctance of the Federal Government to continue with discussions to address the inefficiencies in the current fragmented water industry in Selangor.
In April 2011, the State Government had agreed to implement a proposed restructuring with the Federal Government that would ensure the long term sustainability of the Selangor water industry through the treatment and supply of water by a holistic water operator, wholly-owned by the State Government. The proposed restructuring would not only ensure the long-term, sustainable supply of water to Selangor through the development of the Langat 2 Water Treatment Plant ("Langat 2 WTP") but would also address the inefficiencies of the current fragmented water business model in Selangor.
In a meeting held on 6 September 2011, despite the State Government's previous agreement to the proposed holistic restructuring, the Federal Government through the Ministry of Energy, Green Technology and Water had insisted on proceeding with the development of Langat 2 WTP on a stand-alone basis without implementing the remaining proposals under the previously agreed restructuring of the Selangor water industry. The Federal Government also appeared reluctant to proceed with any further discussions on the Selangor water industry restructuring without the State Government first agreeing to the development of Langat 2 WTP.
The Selangor State Government stands firm on its view that proceeding with the Langat 2 WTP without concurrently implementing an acceptable restructuring plan to address the failed business model of the Selangor water industry would not only perpetuate the current inefficiencies but effectively transfers the burden of unjustifiably high water tariffs to the rakyat. Without the proposed restructuring, the inefficiencies of the current fragmented business model such as the rate of non-revenue water (NRW), which continues to remain high at 32%, will remain unresolved and continue to burden the rakyat of Selangor.
The proposed restructuring that the Selangor State Government had agreed to implement in April 2011, which following the meeting yesterday appears to be no longer acceptable to the Federal Government, would have ensured the long-term sustainability of the Selangor water industry via a holistic water operator model that has been so successfully implemented by the State of Penang and subsequently duplicated in the States of Melaka, Negeri Sembilan and Johor.
Nonetheless, the Selangor State Government remains committed to the restructuring of the Selangor water industry via a holistic business model, which has proven to be sustainable in the long run and will not unnecessarily burden the rakyat of Selangor. In fact, the Selangor State Government remains prepared to continue holding regular and concurrent discussions on an expedited basis on the development of the Langat 2 WTP and the restructuring of the Selangor water industry to arrive at a solution that is beneficial to the rakyat.
YB DR XAVIER JAYAKUMAR
Selangor State EXCO
10 September 2011
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