The Edge Financial Daily reported that Syarikat Pengurusan Aset Air Bhd (PAAB) will acquire the bonds issued by the Selangor state water concessionaires through its-wholly owned subsidiary Acqua SPV Bhd for the amount of RM6.5 billion. The paper further quoted a market source that “in terms of price, the buying back is at 94.49 against mark to market value of only 54.54 at the end of last month”.
It is bad enough that the Federal Government has decided to bail out the Selangor water concessionaires, but for it to pay a whopping 73.2% higher than the market vallue of these bonds borders on being outrageous and an abuse of taxpayers’ monies.
This rescue deal for the private concessionaires is reminiscent of the Malaysian Airlines System bailout when the Federal Government paid RM8.00 per share, or 121% higher than the market price of RM3.62 per share to Naluri Bhd, owned by Tan Sri Tajuddin Ramli in December 2000. In fact, the Government has yet to see any returns on its “investment” for the stock price has slumped to RM1.59 (as at yesterday) or a 80.1% decline for its investment after 10 years. The company continues to be troubled as it made RM242.3 million in losses for its first quarter this year in its financial results released this week.
It is inexplicable that the Government has decided to settle the outstanding bonds of these privatised water companies when it should be the shareholders of these companies themselves who should be responsible for their debt.
In fact, when these companies were profitable, they have declared handsome dividends for their shareholders. Among the concessionaires, Syarikat Pengeluaran Air Sungai Selangor Holdings (SPLASH), whose parent company is Gamuda Bhd, declared dividends of RM578.6 million in 2007 while Puncak Niaga Holdings Bhd had declared dividends amounting to RM214 million between 2006 and 2010.
The above certainly makes true the dictum of the BN Government privatising profits and socialising losses by taking over the debt burden of these companies.
The debt bailout is worsened by the fact that the Government has not been transparent with the whole exercise when the Minister of Energy, Water and Green Technology, Datuk Peter Chin announced that there has been no cabinet decision on the matter earlier this week.
To date, we still do not know how the Federal government plans to restructure the water industry in Selangor based on the Water Services Industry Act 2006 after taking over these debts and whether these private concessionaires would be required to repay the Government for the bailout.
The Minister must no longer pretend to be clueless about the entire exercise and disclose the full terms of the bailout exercise as this affects the basic right to water of all residents in Selangor, Kuala Lumpur and Putrajaya as well as billions of ringgit of tax-payer’s monies. Unless of course, he is completely powerless in his own Ministry, with key decisions made without his knowledge, in which case, he should then just resign honourably to protect his personal reputation and integrity.
2 comments:
This the result of having a fully owned Bumi company governed the exclusive right to everything a good example is like MAS.
To begin it, the people running this company is run by a board who are not only untrained and unprofessional. Their only interest is, at the end they know the government will be there to bail them out if they are i troubler given them what they want. The money is yours and they are not a bit worried about it and all they have to do is sanction they deal and make it look legal. That is the reason why a country with so much of natural resources should have billions in reserve, unlike Singapore that has nothing now has billions in reserve and one of the few nations in this world who does not owe anyone a cent. Malaysia should even be better but the money is squandered not to mention corruptly taken away and about to go bankrupt. No doubt some of them are very worried now and are starting to try and claw back the money from, not the money that took them away, but from the people !
As a consequence the company, just another good example like MAS the company was and still is in big trouble. The worse part is the board of directors are not at all worried bout it.
Look at who is managing Air Asia a company that shenanigan Mahathir literally gave away to a non Malay and is doing well and expanding is making millions compared with the millions MAS is loosing. Why ?
The present regime knows, from day one, damn well the government will bail them out or pay them big premium after some years. Thus making them instant millionaires or billionaires at the expense of the people.
This is in return for their support for Najib to stay as president of Umno thus as P.M. of Malaysia just like what shenanigan Mahathir did during his watch as P.M.of Malaysia. He indeed sets the example for all P.M.s after him.
The biggest trouble is the Malays in the country are too 'blind' to see that and still years after years are voting them to stay in power to keep enriching themselves, their families and their cronies.
In fact is, at the end, the stupid morons don't even realize that everyone in Malaysia including themselves is paying for their follies including the majority Malays. Though they contribute nothing or very little to the nation's coffer I might add.
It is time to up and vote the present regime out in the coming GE, enough is enough !
The govnment always asked us to be thrifty,to tighten our belts but they got no qualms paying overprice for all things like PKFZ land paid to a chinaman in billions overprice,the IPP contracts which need fat subsidies forever evnthough already so profitable,the hihgway tolls concessaire which need reimbursement every year if not allow toll fee hike,and now this water thing overpaid price of 73%.Whats wrong in the heads of these people, we rakyat are almost out of food but they spent our taxes like no tomorrow.I think we have too many insane people running the country.
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