The Federal Government’s agreement to enforce Section 114 of the Water Services Industry Act 2006 (WSIA) in making the restructuring program of the water industry in Selangor a success has been received positively by Pakatan Rakyat leaders.

“Pakatan Rakyat welcomes with open arms, the statement by the Minister of Energy, Green Technology and Water, Dr. Maximus Ongkili which gave the Federal Government commitment that it will use the Water Services Industry Act (WSIA) to forcibly restructure the industry,” was said jointly by Rafizi Ramli, Tony Pua and Dr Dzulkefly Ahmad earlier today.

They went on the add that the statement itself is historic as it was the first time a Federal Government Minister conceded that it will invoke the Clauses 114 and 191 of WSIA to compulsorily acquire these privatised water companies. Members of Parliament from Pakatan Rakyat who include Dr. Dzulkefli Ahmad, William Leong, Charles Santiago and Tony Pua had since February 2009 pleaded to the then Ministers in charge of Water to exercise their powers under the Act, but to no avail.

However, they wish to remind the Federal Government that the compulsory acquisition must not be an excuse to make excessive compensation to these concessionaires.

“The relevant compensation amounts must be derived from the formulas which are defined in the concession agreements in the event of buy back by the government”.

“Based on our estimates, the value of compensation could be as low as RM6.3 billion but not exceeding RM7.6 billion highlighted by Selangor Menteri Besar, Tan Sri Khalid Ibrahim yesterday”, they explained.

Pakatan rakyat also reminded the Federal Government not to delay the takeover exercise as it is within the powers and legal rights of the state government to withhold all remaining necessary approvals for the Langat 2 project to proceed in the occurrence of a hold up.

On 26 February, a Memorandum of Understanding (MOU) was signed by the Selangor state government and Putrajaya that implied the restructuring of the Selangor water industry by the Federal Government who in return would receive approvals for the construction of the mega-billion ringgit Langat 2 water treatment plant.

Via the Water and Services Industry Act 2006 (WSIA), Putrajaya will be able to intervene and nationalise Selangor water assets.