Malaysia may revise privatisation plan

The Malaysian company Puncak Niaga Holdings Bhd could end up with a smaller role in the privatisation of water supply in Selangor, Kuala Lumpur and Putrajaya given changes that may be made by the federal government.

Puncak Niaga unit Syarikat Bekalan Air Selangor Bhd was supposed to take over the water privatisation project in Selangor and the federal territories of Kuala Lumpur and Putrajaya recently from Perbadanan Urus Air Selangor Bhd (Puas). However, the deal was scuttled after the government put on hold all water projects in the country pending further studies and the creation of the National Water Council (NWC). The government was expected to issue details of the revised water privatisation plan at the end of July. Besides Selangor, changes are expected to affect privatisation projects in Sabah and Negri Sembilan.

Some industry analysts believe the government is concerned about the impact of privatisation on water tariffs. Syabas is believed to have submitted a proposal to increase the water tariff in Selangor by 45% next year in return for upgrading the state's water supply network.