KDEB gets Langat II water treatment deal

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Wednesday January 23, 2008

KDEB gets Langat II water treatment deal

PETALING JAYA: Kumpulan Darul Ehsan Bhd (KDEB) has been awarded the contract to build and operate the Langat II water treatment plant that will receive raw water from Pahang.

The Federal Government has told the Selangor state investment arm to lead in the consolidation of the state's water assets, Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik said.

He said KDEB had been asked to start negotiations with water concession holders with the view of merging their assets.

“The initiatives could be done in different forms. It could be a buyout, a joint venture or a consortium,” he told the media after OCNED Water Technology Sdn Bhd and Denmark-based NIRAS AS signed an agreement to form a joint venture yesterday.

“It's up to them to decide on the ownership (of the newly formed entity),” Lim added, adding that KDEB should lead the initiative as it owned equity stakes in several water-related companies.

KDEB owns 55% stake in Konsortium Abbas Sdn Bhd and 30% each in Syarikat Pengeluar Air Sungai Selangor Sdn Bhd and Syarikat Bekalan Air Selangor Sdn Bhd.

Lim said the merger would put the state's fragmented water industry under a “holistic water service company”.

He said the newly formed company would be given a perpetual licence; thus water supply and treatment services would no longer be on a concessionaire basis. However, unlike the concessionaire, the licence would be revoked without compensation if the company did not operate up to standards, Lim said.

The consolidation of water assets is part of the plan to place the water service industry under the Federal Government's purview.

On the Pahang-Selangor inter-state water transfer project, Lim said he expected construction works to start in June for completion by 2013.

Due to the delay in the project, he foresees the likelihood of a water shortage prior to completion of the project.

Lim said the water consumption in Selangor, including Kuala Lumpur and Putrajaya, of four billion litres per day was expected to increase by 500 million litres in the next three to four years.

To prevent a water shortage, the Government would kickstart the RM2bil pipe replacement project to stop leakages that result in wastage, he said.

Apart from water conservation, the alternative sources of water such as tapping into the groundwater should be explored, he added.

Lim said private companies like OCNED were encouraged to look for groundwater sources as the country's dependency on surface water sources was at the mercy of the weather.

Water facilities builder OCNED has tied up with NIRAS, which specialises in groundwater and environmental engineering, for technical assistance and training from the latter.