Call on Keng Yaik to present White Paper in Parliament on June 20 on the reasons and conditions for the RM2.9 billion Federal Government funding of the Syabas water privatization of  Selangor/Kuala Lumpur/Putrajaya, including a RM1.34 billion bail-out of Selangor government water debts

Media Statement (2)
by Lim Kit Siang

(Petaling Jaya, Saturday): Minister for Energy, Water and Communications Datuk Seri Dr. Lim Keng Yaik should present a White Paper in Parliament on June 20 on the reasons and conditions for the RM2.9 billion Federal Government funding of the Syarikat Bekalan Air Selangor (Syabas) water privatization of Selangor/Kuala Lumpur/Putrajaya, which includes  a RM1.34 billion bailout of Selangor government water debts. 

At the third parliamentary roundtable on water federalization and privatization yesterday, the  Deputy Secretary-General II of  Ministry of Energy, Water and Communications, Teo Yen Hua, said that as a result of Keng Yaik’s intervention,  the Selangor/Federal Territory/Putrajaya water supply privatization concessionaire Syabas has stopped importing water pipes from Indonesia for the RM375 million Phase One pipe replacement programme in the Klang Valley.


On Monday, Keng Yaik had revealed that Syabas had violated Provision 18 of the concession agreement stipulating that any pipe installation project carried out by Syabas should be through open tender and that only local materials could be used.


Keng Yaik’s intervention to stop Syabas from by-passing the local water-pipe manufacturers is most  commendable, and the White Paper should give all available details as to the quantity of Indonesian pipes (and their value)  which had been imported and how such a contravention of the concession agreement could have been allowed to take place for more than a month.


There is however another matter which had not been addressed, i.e. the stipulation of an open tender for any pipe installation project.

At the roundtable yesterday, I produced documentary proof that there was no open tender in the full sense of the term as there had been manipulation and tampering with the tender process for the RM375 million Phase One of pipe-replacement project in the Klang Valley.


This was because a day before the tender closed on April 26, 2004, Syabas sent to all tenderers the new stipulation designating two companies as obligatory suppliers for pipes and fittings, namely: Laksana Wibawa Sdn. Bhd (for supply of mild steel, ductile iron pipes and fittings) and Musa & Rahman Plastic Industries Sdn. Bhd. (for supply of high density polyethylene [HDPE] pipes and fittings).


Both these nominated companies are not only relatively unknown, they raise  disturbing questions  about the propriety of such last-minute distortion of the tender process by designating  companies to be the obligatory suppliers, conflict-of-interest  and the background of the designated  companies, as Laksana Wibawa, Puncak Niaga and Syabas are believed to have a common factor in Tan Sri Dr. Rozali Ismail, who is executive chairman of both Syabas and Puncak Niaga. 


Teo did not show any surprise when I produced the documentary evidence and he said  the Ministry was fully aware of the facts of the case when I offered to give him a copy of the documentary evidence.


Keng Yaik should report to Parliament in the White Paper the outcome of his ministry’s intervention to ensure that the tender process by Syabas is fully open, without any tampering or manipulation, as for instance, whether a new tender would be called for the RM375 million Phase One pipe replacement project.


During the briefing at the parliamentary roundtable, another government representative, Dr. Chin Yoong Kheong, Director, KPMG,  which is the  Ministry consultant on water services, said that three  states are operationally efficient in the management of water services, namely Penang, Perak and Johore.  He said comparatively, there is one state which has outperformed Penang in efficiency, but he declined to name the state although repeatedly pressed by other participants, on the ground that KPMG is bound by the rules of confidentiality with regard to its consultancy contract with the Ministry.

As Keng Yaik has repeatedly called for transparency as well as the fullest participation by all stakeholders, whether MPs, private sectors, NGOs and the consumers in  the restructuring of the national water services industry, he should make public all the reports which his Ministry had commissioned KPMG to do to survey and study the water services, whether in the various states in Malaysia or in other countries.


The White Paper on Water federalization and privatization should outline the gist of these various KPMG recommendations, reports and studies, as well revealing the identity of the state in Malaysia  which KPMG had found to be operationally even more efficient than Penang in water management and services – as this is a matter of public interest which MPs, NGOs and the consumers at large are entitled to know.




*  Lim Kit Siang, Parliamentary Opposition Leader, MP for Ipoh Timur & DAP Central Policy and Strategic Planning Commission Chairman