Tuesday 11 September 2012

Langat 2 tender opens despite standoff

The federal government has pushed ahead with the tender process for Langat 2 water treatment plant despite failing to obtain the Selangor government's green light to proceed with the multi-billion ringgit project.

According to a notice on the Water Asset Management Company (PAAB) website, bids are to be submitted by Nov 20.

NONEThe tender advertisement, posted on the PAAB website, said that a tender briefing will take place tomorrow at Menara Multi-Purpose in Kuala Lumpur. Tender documents, which cost RM10,000, will be released on the same day.

"Details of the site visit will be disclosed during the briefing," said PAAB.

The Selangor government has refused to give the nod for the Langat 2 project on grounds that it must be negotiated together with the state's water restructuring exercise.

However, the federal government is adamant that the two issues should be discussed separately.

Deputy Prime Minister Muhyiddin Yassin, who chairs a cabinet-level committee on the issue in July, had instructed the attorney-general to look into ways to go ahead with the project without Selangor's approval.

AG okays tender exercise

China Press on Monday quoted government sources as saying that attorney-general Abdul Gani Patail had told the committee to go ahead with the tender despite Selangor's resistance.

Selangor is opposed to the project, which includes piping water from neighbouring Pahang, as it argues that the state has more than enough water.

azlanThe Langat 2 project is estimated to cost RM8.7 billion and will be used to treat water channeled from Pahang through a 45km tunnel.

Selangor is trying to wrest control of Syarikat Bekalan Air Selangor (Syabas) in order to restructure the company before handing it over to the federal government.

It said that this was necessary in order to keep the cost of treated water at affordable levels for Selangor residents.

Menteri Besar Abdul Khalid Ibrahim has said that the state was willing to incorporate the Langat 2 plant if the water industry restructuring can go ahead.

In response, the federal government said the exercise it must be on a"willing buyer-willing seller basis", with concessionaire Syarikat Bekalan Air Selangor (Syabas) agreeing to Selangor's buy-out offer.

However, both Syabas and its parent company Puncak Niaga have rejected Selangor's RM9.2 million offer, claiming that it was too low.

Tainted Japanese company

Meanwhile, tunneling works for the 45-km pipeline has already begun and it is being undertaken by a Japanese-led consortium involving four companies, one of which has a tainted reputation abroad.

pahang selangor raw water transfer project 180209
The company - Nishimatsu Construction Co - has faced investigations in Japan over an alleged slush fund which led to the arrest of several executives, including its former president Mikio Kunisawa.

In 2005, the company again hogged headlines after the company was accused of flouting safety standards at a public inquiry into the Nicoll Highway collapse in Singapore.

The three other companies in the consortium are Shimizu Corp (project leader) and local building giants UEM Builder and IJM Corp.

Inked in May 2009, the deal with the consortium was worth RM1.3 billion and is financed by the Japan International Cooperation Agency and Japan Bank for International Cooperation.

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