KUALA LUMPUR (May 27, 2008): By Giam Say Khoon
State governments are allowed to take over all water-related assets if they have sufficient budget, said Energy, Water and Communications Minister Datuk Shaziman Abu Mansor.
However, he said the state governments have to get a "special licence" from SPAN (National Water Services Commission) before they can buy over the assets.
"If they want to own the assets and do not want to sell it to PAB (Water Asset Holding Company), they can do that. But when it comes to rules and regulations, they still have to adhere to SPAN," he told a press conference in Parliament lobby today.
"But I do not see a reason why the state government wants to do that because we are giving them loans with lower interest rate and longer periods," he added.
Shahziman said the federal government has no problem with the Selangor government to take over the water services companies in the state.
"It is in line with the ministry's policy when we enacted the Water Services Industry Act in 2006," he said, adding that the state government has to give a golden share to the federal government.
Shaziman said this is to allow the federal government to step in should there be anything that could burden the people or jeopardise the water industry.
He added that the ministry is yet to receivce a proposal from the Selangor government.
Shaziman also said SAPN is planning to implement a mechanism to standardise the calculation of water rates in the various states.
For that reason, he doubted the plan of the Selangor government to give 20 cubic metres of free water from Sunday (June 1).
"This is because the federal government will act to ensure that profit margins are kept very low as it is a basic necessity. Once they have gove through the mechanism and where a ceiling will be imposed on the profit margin, I do not think any state can give free water," he said.
Asked about the price of the water, Shaziman said he was "not sure" whether the tarriff will be lower.
However, he said there will be some adjustments and probably the water rates of some states will go up and some will fall.
"I have not seen the numbers yet. But certainly we can lower the rate of water treatment," he said.
In an immediate response, Selangor Mentri Besar Tan Sri Khalid Ibrahim disagreed that the standardisation of water tariff by the federal government will stop the state from giving free 20 cubic metres of water to the people.
He said the federal government will only set the tariff on water supplied by Syabas.
"We have a different set of calculation for the 20 cubic metres of water and it will not be affected by the new tariff," he told reporters when met in Parliament lobby.
On whether subsidy will be provided to water concessionaires in the state, Khalid said the subsidy issue was yet to be discussed by the state government.
He clarified that the water industry can be classified into three categories and water sources from the rivers and treatment plants did not fall under the jurisdiction of the ministry.
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