After years of delay, the Selangor state government had finally agreed to allow the Langat 2 water treatment plant to be constructed.
The project was scheduled for construction in 2010 but was delayed because of the Selangor government's refusal to issue a development order.
On Wednesday, the Federal government and the Selangor state had signed a memorandum of understanding (MoU), allowing the state government to take over the equity of four concession companies.
Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili represented the Federal government while Menteri Besar Tan Sri Abdul Khalid Ibrahim represented the state government at the signing ceremony held at the Perdana Putra Complex.
The ceremony was witnessed by Prime Minister Datuk Seri Najib Tun Razak, Deputy Prime Minister Tan Sri Muhyiddin Yassin and the Chief Secretary to the Government Tan Sri Dr Ali Hamsa.
Once completed, Langat 2 would treat 1.89 billion litres of raw water to cater for the water demands in Selangor, Kuala Lumpur and Putrajaya until 2025.
Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim said the takeover is expected to be completed within three months.
He said the four companies will be placed under a water consortium company, under the Kumpulan Darul Ehsan Berhad (KDEB), a state wholly-owned company.
The four companies are Puncak Niaga Sdn Bhd, Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS), Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH) dan Konsortium ABBAS Sdn Bhd (ABBAS).
In a press statement, Abdul Khalid said the takeover will involve equity, responsibility and retention of non-management staffs.
“KDEB will pay RM9.65 billion to the shareholders of the four companies while the Federal government will inject RM2 billion into the deal to help the state government in the takeover process,” he said in the statement.
In return, he said, the state government will issue a development order to build the Langat 2 water treatment plant and distribution system (LRAL2).
He said while waiting for the Langat 2 plant to be ready, the Selangor state government, to ensure clean water supply, will carry out mitigation programme worth RM900 million which has been allocated by the Federal government.
He said the state will also begin the Hybrid Off River Augmentation System at Sungai Selangor and reduce the percentage of non-renewable water from the current 33 per cent within six months.
“The MoU is right on time when the people are struggling with water crisis and this proved that the water industry need to be restructured for better services and lower tariff,” he said.
Meanwhile, in a joint statement with Abdul Khalid, Ongkili said the state government must approve the construction of the plant within 30 days of sigining the MoU.
He said the Federal government had also agreed to set up a committee which the state government will also be part of, to ensure smooth implementation of the LRAL2 project.