Selangor says has cheaper water treatment option

By Amin Iskandar

October 15, 2012

File photo of the Sungai Semenyih water treatment plant in Putrajaya.

SHAH ALAM, Oct 15 — Selangor has a cheaper water treatment option without the need to raise tariffs to foot the construction of Langat 2, a new treatment plant proposed by Putrajaya to cope with a forecasted supply shortage, says Tan Sri Khalid Ibrahim.

The Selangor mentri besar claims to have found a viable alternative method from a Canadian company that utilises membrane technology to extract fresh water from existing plants and turn them into water suitable for household use.

“The total cost will be in the vicinity of RM500 million to RM750 million compared to the RM3 billion to RM5 billion to build Langat 2,” Khalid told The Malaysian Insider in an exclusive interview.

Khalid says the state has a cheaper option to supply treated water.

He explained that the Canadian company’s technology involved taking water from several treatment plants and treating them separately to produce one billion litres of water daily, instead of doing all the work from one main plant, which was the purpose of Langat 2.

“But you have several plants so you can add 50 litres a day and three million more from elsewhere and you add that all, you get one billion litres a day.

“In short, we will have cheaper water resources at very, very low prices,” he said, adding that through this new method the government will not have to raise tariffs to produce treated water.

The tussle for control of treated water supply in the country’s most developed state has become major election fodder in the run-up to national polls due soon after the state’s sole water distributor, Syarikat Bekalan Air Selangor (Syabas), raised an alarm earlier this year of a possible crisis in the near future due to the near zero reserves at the state’s water treatment plants.

The Pakatan Rakyat (PR) state government has steadfastly opposed the Barisan Nasional (BN) federal government’s Langat 2 project, citing the high costs involved that would force the state to increase the tariffs for water and renege on its pledge to provide the utility cheaply, a policy PR had introduced after winning power in Election 2008.

“It will cost at least RM3 billion to RM5 billion just to build Langat 2, a treatment plant capable of storing water from Pahang and to treat it before it is distributed, without taking into account the cost of digging the tunnel and all that,” Khalid said.

Despite this, Deputy Prime Minister Tan Sri Muhyiddin Yassin has reportedly suggested that the federal government may go ahead with building Langat 2 without first getting the agreement of the state government.

Khalid says some people from the federal government do not understand the water issue.

Muhyiddin, who has been tasked with chairing a federal panel to resolve the water issue, said he has asked the Attorney-General’s Chambers to see whether the National Land Code or the Land Acquisition Act will allow a project deemed to have national importance to be built, enabling the federal government to circumnavigate the state without causing any detriment to Putrajaya.

“The Attorney-General’s Chambers has yet to respond, negotiations with the state government are continuing in efforts to get them to issue a development order for the construction of Langat 2,” the country’s No. 2 told reporters over the weekend.
Langat 2, which is part of the RM8.9 billion Pahang-Selangor Raw Water Transfer project, would be able to bring in 1,130 million litres a day with which to supply residents in Selangor and the two federal territories of Kuala Lumpur and Putrajaya.

Khalid, however, is confident that Selangor voters will support the state rather than back a concession company interested only in raising tariffs for high profit.

“The people of Selangor understand. They know that with the concession company they will have to pay high prices.
“Secondly, my biggest obstacle is to explain to people from the federal government who do not understand this issue.

“Because most of these people were not involved in drafting the Water Act. The most important minister at that time was Tun Dr Lim Keng Yaik. But he has retired,” Khalid said.

“That’s why only a few can understand and they are afraid to explain to their minister because they are scared of telling the minister ‘you do not understand and you are wrong’,” he said.

The protracted battle for control of water resources in the country’s richest state of Selangor has thrown a spotlight on how much money is at stake in the strategic industry and is potentially another example of Mahathir-era privatisation gone wrong.

It could also tilt the balance in the battle for both Selangor and Kuala Lumpur depending on who voters ultimately blame for any cuts in their water supply. PR parties rule Selangor and control 10 out of 11 parliamentary seats in the Federal Territory.

Puncak Niaga, which operates the vast majority of Selangor’s water treatment plants — 29 out of 34 — is about 40 per cent owned by Tan Sri Rozali Ismail, who is Selangor Umno treasurer and Malaysia’s 31st richest man according to Forbes.

It owns 70 per cent of Syabas, with the Selangor government holding the remaining 30 per cent, giving the Umno leader significant control over the treatment and distribution of water in the state.

Puncak Niaga and Syabas have also reportedly held out for more money from Selangor, rejecting two offers from the state as too low, including a RM9.2 billion offer to buy out the two companies as well as two other concessionaires, Splash and Konsortium Abbas, despite the latter accepting the offer.

About 30 per cent of treated water in Selangor is wasted or NRW (non-revenue water) which the Selangor government has used as leverage over Syabas to deny the company the right to raise tariffs that purportedly cost the latter hundreds of millions of ringgit in revenue.