Tuesday, September 28, 2010

Ah... According To Sources

For the desperately in seek of the mighty tomato sauce...

In the Edge Financial Daily:

  • Syabas may get tariff hike
    Written by Jose Barrock
    Tuesday, 28 September 2010 12:12

    KUALA LUMPUR: A water tariff hike of between 15% and 20% may be in the offing for Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), sources said.

    The increment would be a lifesaver for the water treatment players, Syarikat Pengeluar Air Sungai Selangor Holdings Bhd (Splash) and Konsortium Abass Sdn Bhd, which are both on the verge of defaulting on their debt commitments.

    Syabas has not paid the water treatment players, which supply the treated water, because the tariff hike that was scheduled to kick in early last year did not materialise.

    It is understood that the federal government has agreed in principle to the tariff hike for Syabas, but has yet to get the green light from the Selangor state government which is run by the opposition Pakatan Rakyat.

    Syabas has the mandate to supply treated water to Kuala Lumpur, Selangor and the federal capital of Putrajaya and under its concession agreement was supposed to get a 37% tariff hike last year.

    “The federal government has more or less agreed, it’s up to the state now. The situation is critical as the water players, the water treatment plant operators are in jeopardy,” a source told The Edge Financial Daily.

    It is not clear how Selangor will react to the new tariff hike as it had opposed the implementation of the 37% hike and attempted to terminate Syabas’ concession on the grounds that Syabas had not lived up to the main tenets of its concession, such as reducing the level of non-revenue water to 28% in 2008.

    However, the state may be agreeable to the lower tariff hike this time considering the adverse impact that the delay has had on the industry.

    Both Splash and Konsortium Abass are seeking legal redress against Syabas.

    Konsortium Abass is at loggerheads with Syabas, and sent an originating summons dated Oct 5, 2009 for about RM63 million for payment of electricity cost and purchase of water invoices, among others.

    Meanwhile, Splash initiated legal proceedings against Syabas in November last year, pressing for the payment of RM196 million for unpaid invoices from as far back as December 2008 to August 2009.

    As the water operators have not been receiving their payments, both Malaysian Rating Corp Bhd and RAM Ratings have downgraded all their debt papers.

    According to insiders, total bonds issued by the Selangor water players are in excess of RM6 billion.

    The federal government has been giving Syabas soft loans to help it sustain its operations. Industry players say the company utilised the loans to pay 50%-60% of its overdue payments to the water treatment companies.

    Under the current structure, water companies borrow short to finance long-term projects, which brings about the need for tariff increases every now and then.

    A thorn in the side of the industry and both the state and federal governments, has been the issue of the water players defaulting on their bonds.

    The other water treatment player in Selangor is Puncak Niaga (M) Sdn Bhd (PNSB). PNSB is wholly owned by Puncak Niaga Holdings Bhd. Puncak Niaga also has 70% equity interest in Syabas, which explains why PNSB is not seeking legal redress against Syabas.

    Puncak Niaga is 41.25% owned by businessman Tan Sri Rozali Ismail, who is said to be closely linked to Umno. The Barisan Nasional controlled Selangor prior to Pakatan Rakyat coming to power.

    The share price of Puncak Niaga was up five sen to RM2.85 yesterday.

    Konsortium Abass, meanwhile, is 55%-owned by Kumpulan Perangsang Selangor Bhd (KPS) and 45% by Operasi Murni Sdn Bhd.

    Splash’s shareholders are Gamuda Bhd, which has 40% equity interest, KPS (30%) and businessman Tan Sri Wan Azmi Wan Hamzah’s The Sweet Water Alliance Sdn Bhd (30%). KPS is a 60% unit of Selangor’s investment arm Kumpulan Darul Ehsan Bhd and has 30% equity interest in Syabas.

    Konsortium Abass manages the Sungai Semenyih Water Supply Scheme implemented by the Selangor government and supplies treated water to Syabas to distribute to southwest Kuala Lumpur, Petaling Jaya, Shah Alam, Klang, Putrajaya, Cyberjaya, Sepang, Puchong, Seri Kembangan, Bandar Baru Bangi, Kuala Langat and surrounding areas.

    The latest deadline for the consolidation of the water industry in Selangor is slated for year-end after several postponements, but most water players are not optimistic that such a consolidation can be concluded so soon due to the political factors.

    This article appeared in The Edge Financial Daily, September 28, 2010.


Can you count all the 'according to source' , 'may', 'according to insiders' and 'it is understood'.



Take all those away, what does one get?


Credible information? Credible article of facts based on unknown source?

I still remember so much that article on the Sun: Credible information vs speculation.

ps: the Sun can so easily ask the Edge Financial Daily eh?

ps: Why Can't Our Financial News Have More Credible Information?


David Koay said...

I think the SC should more closely monitor any conflict of interest in the financial reporters/writers i.e.their shareholdings, direct/indirect, related investments etc. Though rules/regulations have been put in place to prevent conflict of interest, SC doesn't seem to enforce that, or that I've yet to hear any of these cases.

Moolah said...

And the bulk of such reports comes from...... ?

And who is the reporter(s) ..... ?


bonny b said...

Isn't it sad that a newspaper owned by a component party of the ruling coalition government is allowed to continuously publish such misleading articles? It tells us clearly how well investors are protected in this country..Fish is getting increasingly unaffordable...sigh!!

Moolah said...

bb ( bonny b): If this story is not about Syabas but about some 'murder' case, and there's no opportunity to make money from the news, how would one feel about such a 'news'? (pg 3. the Sun, has one article called 'AG: Stick to FACTS!)

Is this news when everything is based on this so-called 'source'.

And how many times have we seen corporates wasting time and answer to queries from Bursa. These corporates have nothing else better to do? What's the 'monetary value' just for corporates to take time to answer to such news?

And once the story is denied... would we ever know who is the source?

Would we know if the source even existed?

Would we?

yeah.. it's amazing that such reporting continues and continues based on the merry saucing stories.... again ... and again...

bullbear said...

Is Brady Barr also bb? ;-)

Would like your view on Poh Kong, our local goldsmith, when you find the time. Thanks.