Finally a water deal?

THE offer has been made and now it is a matter of wait-and-see if it will be accepted.

The protracted sale and purchase of the last holdover water concessionaire in Selangor seems to be heading to a conclusion. Gamuda, which owns 40% of Syarikat Pengeluaran Air Selangor Sdn Bhd (Splash), says it will respond to the offer in a week.

Sweet Water SPV Sdn Bhd and Viable Chip Sdn Bhd have 30% stake each. Sweet Water is the private vehicle of businessman Tan Sri Wan Azmi Wan Hamzah.

Splash was awarded a 30-year concession in January 2000 to build, operate and maintain the water plant. With just under 18 years to run, the offer of RM2.55bil by the Selangor government is a 28% discount to the net book value of Splash as of June 30.

The offer might have a chance of succeeding given the valuation now is based on book value, albeit at a discount, which is something shareholders of Splash are keen to receive.

With the issue protracted for about a decade, common government between the state and federal levels is also an incentive to get the deal done. And also, finalising the deal now will allow the authorities to finally get down to settling the protracted water issue in the state which has been dogged by non-revenue water losses for years.

With leakages costing the state about 30% of the fresh water it purifies for sale, fixing the leaky and old pipes is a priority in water conservation in the state. It will also allow for the restructuring of the state’s water supply which is essential in driving new businesses into the state.

There have been many stories of how the problems with water supply has been a bane to investment and in time this will be fixed. This will also allow the state, which has been plagued by water issues because of failing infrastructure, to improve the supply to residents of the state which has been for long wanting this problem to be solved.