Press statement regards Selangor water impasse

The 8 Pakatan Rakyat senators support the Selangor government effort to undertake a holistic view of the water resources, climate changes and restructuring the water distribution processes to make water supply affordable and sustainable. Federal government has made a fundamental error by privatizing to 4 companies instead of corporatizing into one entity the water supply management in Klang valley. Since privatizing, the Federal Government has bailed Syabas out many times using Malaysian tax-payers’ money and is about to give another soft loan to them.

To resolve the current impasse of water supply management in Selangor, the primary consideration that all parties must bear in mind that water is life saving commodity and access to water supply is basic human rights. Therefore Water supply should not be treated as profiteering services. In 2005 Syabas has violated the concession terms and conditions importing RM375 million woth of pipes from an Indonesian company instead of sourcing them locally.   The Indonesian company was owned by Tan Sri Rozali Ismail, the CEO of Syabas. Its public knowledge that the CEO of Syabas gets a monthly salary of RM425000 or RM 5.1 million per year. An audit report on Syabas showed more than 72% of contracts worth RM 600 million in total was awarded to companies chosen through direct negotiation not by open tender process.

Syabas must prove through an independent audit that they have reduced leakages (non-revenue water) in the distribution system and to justify any proposed water tariff hike. Also RM325 million was found to be missing in discrepancies between the public accounts of Syabas and the records of contracts awarded from 2005 and 2007. The four water companies have a combined debt of RM 6.4 billion. The federal government has given Syabas a soft loan of RM 320 million. The total interest on this 20 year loan is RM 250 million, and Syabas will not be required to pay a single sen of this amount. Instead, this cost will be fully borne by Malaysian taxpayer.

In light of this appalling financial mismanagement, the Selangor state government has prevented Syabas from raising water tariffs by 37%, and is now endeavouring to reacquire all water concessions from the private water companies. Their goal is to eliminate the element of privatised profit and socialised losses, stop the corruption and leakage, and ensure quality delivery of water at affordable rates. This move requires public support and pressure to succeed.


The federal government’s current perspective is that the RM9 billion Pahang Selangor raw water transfer project is a non-negotiable undertaking, even though the scheme has been roundly criticized as being both costly and unnecessary by stakeholders and civil society.

The federal approach appears to be focused solely on water supply management, instead of combining it with water demand management for best effect. An effective water demand management plan across Malaysia can save more water in the long run than what the Pahang Selangor Raw Water Transfer Project proposes to supply. By reducing water usage, a water demand management plan will help protect a critical resource water plus the flora and fauna which depend on it. Furthermore, the Government and taxpayers can likely avoid wasting billions of ringgit by finding efficient alternatives to the Pahang-Selangor Water Transfer project and other unwarranted new water infrastructure.

Explore posts in the same categories: From the desk of Senator S Ramakrishnan

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