Another BN's grand bailout of cronies water concessionaires....

The government’s decision to use taxpayers’ money to bail out Selangor water concessionaries with a 73.3 per cent premium above market value drew strong reaction from Petaling Jaya Utara member of parliament Tony Pua.

“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 value of these bonds borders on being outrageous and an abuse of taxpayers’ monies,” Pua said in a statement to Harakahdaily today.

Citing a report from The Edge Financial Daily on Wednesday, Pua pointed out that a source had revealed that Syarikat Pengurusan Aset Air Bhd (PAAB) would be acquiring the bonds issued by the Selangor state water concessionaires through its-wholly owned subsidiary Acqua SPV Bhd for the amount of RM6.5 billion which was at “94.49 against mark to market value of only 54.54 at the end of last month”.

He said the bailout is similar to the Federal government's rescue plan for Malaysian Airlines (MAS) in the past, in which it purchased MAS shares at RM8.00 per share, or 121 percent higher than the market price of RM3.62 per share to Naluri Bhd, a company owned by UMNO-linked tycoon 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.

"MAS 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 with no end in sight to its problems,” said Pua, drawing attention to the national airlines' dismal performance in the first quarter of 2011.

Yesterday, Energy, Green Technology and Water Minister Peter Chin denied the move to purchase the bonds was a bailout, saying that the Federal government was trying to 'stabilise' Selangor's water services industry.

“I wish to stress that the takeover does not mean Selangor water companies who issued the bonds are released from their obligations to pay back their liabilities prior to the takeover by Acqua SPV.

“Thus if the Acqua SPV's bid is successful, the takeover should be looked at as a change in investors from current bondholders to only Acqua SPV,” Chin was quoted as saying.

Despite Chin’s denial, Pua claimed that the debt bailout was made worse by the fact that the government had not been transparent in the whole exercise.

“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, despite the denial of a "bailout" by the Minister,” he said. This is because all four Selangor water concessionaires - Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Sdn Bhd (PNSB), Syarikat Pengeluaran Air Sungai Selangor Sdn Bhd (Splash) and Konsortium ABASS - are unable to pay their bondholders.

Pua said shareholders of Selangor water concessionaires must own up to their debt, and if the companies were profitable, they would have declared high dividends for shareholders. Pua named the concessionaires as Syarikat Pengeluaran Air Sungai Selangor Holdings (SPLASH), whose parent company is Gamuda Bhd, which declared dividends of RM578.6 million in 2007 while Puncak Niaga Holdings Bhd 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," he added.

Pua warned the bailout was set to affect the basic right to water of all residents in the Klang Valley.

“Unless of course, he (Chin) 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," he said.

source:harakah daily

Hutang air: 'Putrajaya terlebih bayar 73%'

The UMNO govt tells us that it has no money to subsidise the price of petrol, gas, sugar, flour, electricity etc.

Walla! now it has RM 6.5 billion to bail out her cronies private water companies.

Gomen bercakap beria-ia tentang perlunya megurangkan subsidi.

Tapi,sebaliknya gomen menggunakan wang rakyat untuk selamatkan syarikat2 kroni yang hampir bankrup...

cheers.