Source: Free Malaysia Today
The Klang MP believes that the federal government’s decision to bail out Syabas was contradicting its original intention of privatising the water company.
PETALING JAYA: An opposition MP said that the federal government’s decision to bail out water concessionaire Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) showed that the country’s privatisation model had failed.
Klang MP Charles Santiago said the bailout itself was contradicting the government’s original intention of privatising utility companies in the first place.
“The idea to privatise was mooted to cut cost on the government’s side and to improve the water company’s delivery system as it is run by the private sector.
“But now the government has to step in and spend a lot of money to save the company which was irresponsibly managed,” said Santiago.
On Wednesday, a financial daily reported that Syarikat Pengurusan Aset Air Bhd (PAAB), the federal government’s water asset management company, would acquire Syabas’ bond debts for a whopping RM6.5 billion.
Earlier, the Selangor government had offered of RM6.3 billion to Syabas in its attempt to acquire its assets before the federal government stepped in.
The water concessionaire’s problem began when it was barred from implementing a 37% tariff hike agreed upon in January 2009, as the Selangor government claimed the water distributor had not done enough to reduce leakages which cost the state millions.
Santiago believed the entire episode could have been avoided if Syabas had a managed itself responsibly in the first place.
“In a normal scenario, when a company makes money it will first pay off its debts before paying out dividends to its shareholders.
“Here we have the water concessionaire (Syabas) doing the reverse which had caused this problem,” said Santiago.
He added that this also proved that the government was willing to pay for the mistakes of a private entity as long as it was a government crony.
“It’s taxpayers’ money that is being used to save this company. Is this the economic system the federal government is promoting under the New Economic Model (NEM)?
“The government seems to have money to bail out its rich cronies but it doesn’t have enough funds to provide subsidies for the poor,” said Santiago.
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Charles Santiago 
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