Selangor lawmaker held ahead of water protest
Apart from the Parti Sosialis Malaysia (PSM) chairman, two other PSM members — Shah Alam councillor A. Sivarajan and party secretary-general S. Arulchelvam — were also detained, said Subang MP R. Sivarasa’s personal assistant, Peter Chong.
“Dr Nasir, Sivarajan and Arul were arrested in KL Sentral,” Chong told reporters at the rally today.
“They are being brought to the Cheras police station,” he added.
Police have mounted road blocks leading to the city and deployed policemen at various train stations near the city centre since early this morning. City police have also warned that the rally is illegal.
The Selangor protest for water rights, which will move from the National Mosque to the National Palace, plans to submit a memorandum to the Yang di-Pertuan Agong over the federal government’s possible multi-million ringgit bailout of Syarikat Bekalan Air Selangor (Syabas).
Another group called the Gagasan Anti-Penyelewengan Selangor (GAPS), which is protesting against the Selangor government, started their rally at the historic Stadium Merdeka in the city this morning.
The police, however, have only allowed two cars with protestors to deliver their memorandum to the National Palace.
About 300 GAPS supporters at the rally has since dispersed.
Some 1,000 protestors at the Selangor water rally, however, have started gathering under the hot afternoon sun at the National Mosque today.
“After prayers, we will march to the Istana Negara,” Batu MP Chua Tian Chang told The Malaysian Insider today.
Rallying cries of “Hancurkan Syabas”, “Hancurkan Umno”, and “Hancurkan BN (Barisan Nasional)” were sounded throughout the mass of protestors dressed in red shirts.
The rally attempts to draw some 20,000 protestors in Selangor’s fight to take over the state’s water industry.
“Our target is 20,000 people,” PKR central committee member Dr Badrulamin Bahron told The Malaysian Insider today.
Selangor’s “Return water rights to the Selangor people” campaign, which was launched on November 13, has surpassed its 100,000-signature target.
“The ‘Return Water Rights’ signature campaign has already reached 120,000 signatures,” Selangor Mentri Besar Tan Sri Khalid Ibrahim tweeted yesterday.
Khalid’s Pakatan Rakyat (PR) administration is fighting for the rights over the water industry and promised to provide the first 20 cubic metres water for free. It also pledged to maintain a fixed 12 per cent increase in water tariffs, compared to Syabas’s plans of a 25 per cent increase in 2012 and a 20 per cent increase in 2015.
Sources told The Malaysian Insider recently that Selangor water bondholders will urge Prime Minister Datuk Seri Najib Razak to intervene directly in the state’s water restructuring deadlock in an effort to safeguard their bonds from being further downgraded.
The Malaysian Insider understands that major bondholders — including CIMB Principal Asset Management, Hong Leong Investment Bank and Great Eastern Life — have drafted a joint letter to Najib asking the federal government to bail out Syabas with a soft loan worth some RM1 billion.
In the letter, the bondholders contend that further downgrades of debt ratings will put capital markets at risk and will seriously impede the government’s effort to promote its Capital Markets Masterplan.
Putrajaya bailed out Syabas once already last year when it gave a RM320.8 million soft loan to parent company Puncak Niaga Holdings Bhd (PNHB) in December to help settle its debts to water treatment concessionaires.
Selangor’s water players — Syabas, Puncak Niaga Sdn Bhd (PNSB), Syarikat Pengeluaran Air Sungai Selangor Sdn Bhd (Splash) and Konsortium ABASS — are at risk of debt payment default as water bonds approach their maturity dates.
The debt service problem started when Syabas was barred from implementing a 37 per cent tariff hike agreed upon in January 2009, after the Selangor government claimed the sole water distributor had not done enough to reduce leakages which cost the state millions.
This in turn led to payment problems between Syabas and water treatment concessionaires PNSB, Splash and Konsortium ABASS, who supply it with treated water.
Selangor water concessionaires are also already in technical default owing to the shortfall of money in the reserve account.
The Malaysian Insider understands that the reserve account, meant to hold at least six months’ worth of bond repayment money, is currently short by some RM50 million.
This shortfall may double in six months if the current water consolidation impasse remains unresolved.
The technical default triggered a downgrade of the debt issuances by Malaysian Rating Corp Bhd (MARC) and RAM Ratings Services Bhd on September 8, who warned of further multiple-notch downgrades in this quarter.
An industry source told The Malaysian Insider that bondholders suffered RM457 million in mark-to-market losses following the downgrade.
A statement by MARC at the time urged the federal and state governments to urgently interfere in the water industry’s restructuring negotiations to prevent a free fall of ratings in following months.
Today, state executive councillor Elizabeth Wong said Selangor aims to petition the Sultan of Selangor in a bid to pressure the water concessionaires to accept the state government’s offer to take over the water industry.
“We have made an offer to Puncak Niaga to buy over their shares,” Wong told The Malaysian Insider at the rally.
“They have not agreed although the other three companies — Syabas, Spash and Konsortium ABASS — have agreed. We offered Puncak Niaga close to RM9 billion, but Puncak Niaga wants RM13 billion with controlling shares,” she said.
Wong further accused the Najib administration of “assisting” PNSB’s resistance efforts.
“The federal government appears to be assisting Puncak Niaga to resist the state government’s offer. But they (the water concessionaires) have overstayed their welcome,” she said.
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