PETALING JAYA: Pengurusan Aset Air Bhd (PAAB) will complete the takeover of water assets in Perlis and Perak by end-May as part of the national initiative to regulate the water services industry.

“Things are moving very fast in these two states at the moment and we expect the agreements to be signed at the latest by the end of May,” a source said, without divulging the value of the deals.

PAAB has said it planned to wrap up the deals in all states by mid-year although chief executive officer Ahmad Faizal Abdul Rahman, who took over from Suhaimi Kamaralzaman in July, said in a December interview with StarBizWeek that “he didn’t like deadlines.”

“We want to do things properly rather than rush things and regret it 10 years later just for the sake of achieving a certain deadline,” he had said.

So far, PAAB, a unit of Minister of Finance Inc, has completed in three states – Negri Sembilan, Malacca and Johor – deals valued at a total RM6.12bil.

The national water restructuring plan, which involves Peninsular Malaysia states and Labuan, is meant to relieve the states and concessionaires of the heavy burden of funding future water infrastructure development.

After the restructuring, this responsibility falls under the purview of the Federal Government and PAAB, which is entrusted to buy over the states’ water assets, making them asset-light and allowing them to focus purely on operations and maintenance.

“Negotiations with the other states are ongoing. (The takeover in) Perlis and Perak, we are quite sure will be done by May. Selangor appears to be the most difficult of all,” the source said.

Selangor remains the most fragmented and complicated with many different players.

The state’s water assets are parked under concessionaires Puncak Niaga (M) Sdn Bhd (PNSB) and Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) – both of which are controlled by Puncak Niaga Holdings Bhd – as well as Syarikat Pengeluar Air Sungai Selangor Bhd (Splash) and Konsortium Abass Sdn Bhd.

Abass is 55% controlled by Kumpulan Perangsang Selangor Bhd (KPS) while Splash is a 40%-owned associate of Gamuda Bhd.

The Selangor government’s investment arm, Kumpulan Darul Ehsan Bhd (KDEB), owns 30% of Syabas while Puncak Niaga holds the balance 70%.

After about two years of negotiations and a change in the state government, no deal has materialised in Selangor despite three offers from the Pakatan Rakyat-led government, with the latest offer totalling RM9.2bil for both equity and assets.

PAAB has said it would come out with a new offer to the concessionaires but so far nothing has materialised. It is understood that PAAB has submitted a proposal to take over the assets of water concessionaires in Selangor to the Energy, Green Technology and Water Ministry and that the ministry is combing through several fundamental issues before the offer can be made to the water players.

PAAB has proposed a RM20bil sukuk programme to spearhead the restructuring of the water industry.