Puncak Niaga

Puncak Niaga (M) Sdn Bhd (PNSB) is a subsidiary of Puncak Niaga Holdings Berhad (PNHB) Group, the leading and dynamic integrated water services company in Malaysia. PNSB holds 5 water treatment concessions with the Selangor State Government, is the nation’s second largest water supply concessionaire, operating, managing and maintaining 29 water treatment plants with a combined capacity of 1,930 million litres per day. (as of Feb 2009)

Puncak Niaga (Malaysia) – KWSB (Pakistan) twinning

In September 2008, Puncak Niaga (‘expert twin') signed a memorandum of agreement with KWSB (‘recipient twin’) to provide voluntary services through a twinning arrangement funded by ADB. Karachi Water and Sewage Board (KWSB) is a government-owned utility responsible for the production, transmission and distribution of portable water in Karachi and managing the city’s sewerage system. Puncak Niaga Sdn Bhd (PNSB) is a subsidiary of Puncak Niaga Group, the leading and dynamic integrated water services company in Malaysia. PNSB holds five water treatment concessions with the Selangor State Government and is the nation’s second largest water supply concessionaire, operating, managing and maintaining 29 water treatment plants with a combined capacity of 1,930 million litres per day. Under a separate concession agreement, another Puncak Niaga subsidiary (SYABAS) supplies treated water to a population of 7.3 million and industrial and commercial users. Recently, the government offered a total RM5.7 billion to take over all four water companies operating in Selangor and buy out their assets – including RM3.1 billion for PNSB. The firms rejected the offer, demanding full compensation for losses of future profits. Under Malaysia’s 2006 Water Services Industries Act, the federal government has embarked on a plan to take over water assets in all states to overhaul the water industry. The Selangor state government wants to nationalize the inefficient water sector, and avert a water tariff hike of up to 37 percent beginning April 2009. Puncak Niaga has been making huge profits, paying out close to RM11 million in directors’ remuneration in 2007. In May 2008, Puncak Niaga Holdings acquired seven water and wastewater treatment projects in China for US$9 million as part of its regional expansion. Puncak Niaga intends to leverage on its expertise and experience in Malaysia to tap the vast opportunities and growth potential offered by the China market.

Puncak Niaga (Malaysia) - Karachi Water (Pakistan) twinning under ADB-WOP

Puncak Niaga (M) Sdn. Bhd. (Selangor, Malaysia) is 'expert twin' to 'recipient twin' Karachi Water and Sewage Board (Pakistan) under the Water Operators Partnership (WOP) program of Asian Development Bank. Twinning as a development strategy has been around since the first millennium. In many cases, towns, universities, and other entities located in geographically distinct areas, but sharing similar characteristics, pair off to foster human contact, cultural exchange, or knowledge sharing. ADB has adopted and improved on this strategy for its Water Operators’ Partnership (WOPs) Program. The WOPs program promotes knowledge sharing and builds the capacity of water operators and utilities in the Asia and the Pacific region. Among its key initiatives is the twinning of 20 water utilities and operators. Whereas most twinning arrangements pair off entities with similar characteristics on the assumption that they will share similar problems and solutions, ADB’s approach is to match a stronger water and sanitation utility (expert) with a developing utility (recipient). The aim is to enable the latter to improve service coverage and delivery, financial sustainability, and other aspects of its performance.

Malaysia's Water Services Industry Act 2006, tariff hike

Jan 8, 2009 — The clock is ticking for the Selangor and federal governments to sort out the sale of water assets in the state, failing which it could turn into a flood of negative publicity for both the Pakatan Rakyat and Barisan Nasional. Some 1.5 million consumers in Selangor, Kuala Lumpur and Putrajaya are facing a 30 per cent increase in water tariffs if water service assets — water treatment plants, dams and pipelines — in the state are not handed over to Pengurusan Aset Air Berhad (PAAB), the Finance Ministry's wholly-owned water assets management company, by March 31. Given the current climate of economic uncertainty, such an increase and its knock-on effects would be a devastating blow to whichever political coalition is perceived to be at fault. Under the 30-year concession agreement inked in 2005 between supply company Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) , the federal government and the Selangor government, periodical tariff hikes are provided for as long as Syabas meets certain conditions. Energy, Water and Communications Minister Datuk Shaziman Abu Mansor recently said that according to the "National Audit Department's estimates, Syabas could increase the tariff by 30 per cent although the agreement stated 37 per cent because the company had met almost all the conditions”. However, the concession can be revoked and the water tariff restructured after the assets have been handed over, according to Shaziman. An ongoing nationwide process of centralising water assets is due as the Water Services Industry Act 2006 requires all water assets except those in Sabah and Sarawak to be sold to the federal government, said to be a move to make water supply management more efficient. Under the Act, assets will then be leased back to the respective states to administer water supply to consumers. The Malacca government recently relinquished its assets for RM889 million.

Malaysia's Puncak Niaga forms voluntary partnership with Karachi Water and Sewerage Board

KUALA LUMPUR, Sept. 5, 2008 (Xinhua) -- Malaysia's major water industry player Puncak Niaga (Malaysia) Sdn Bhd (PNSB) has formed a voluntary partnership with Pakistani Karachi Water and Sewerage Board (KWSB) to provide voluntary services to KWSB through a twinning arrangement. In a filing to Bursa Malaysia, the company, an 82.5 percent-owned subsidiary of Puncak Niaga Holdings Bhd, said the twin arrangement would be implemented and financed by Asian Development Bank (ADB).

Selangor water tariff should, and must, be increased

Eric See To | Jan 26, 2009 - First of all, let me state that I am a (very, very) minority shareholder in Puncak Niaga Holdings Bhd but I am in no other way associated with them. In response to your report titled Stop water tariff hike in Selangor, I feet compelled to share my views on this matter as I am from the camp that believes that future wars will be fought over scarce water. Also, I am sure a vast majority believes that the water industry in Selangor is in need of a drastic infrastructure upgrade and revamp. I don’t know about others but the current projections of demand growth and anticipated water shortages projected for 2007 and 2008 in Selangor really scares me. Malaysians, like most Asians on a global basis, use a lot more water per capita than most other countries, especially the developed countries. Some figures put us Malaysians as using twice as much water than certain developed countries. This is shameful. Therefore, water rates beyond the initial 20 cubic metres must rise to promote prudent use of water. The pending tariff revision proposal ensures that there is no increase for the initial 20 cubic metres. The average person will be minimally impacted while the golf clubs who waste millions of gallons watering their courses will bear the brunt of it.

Malaysia water utility Puncak Niaga acquires China water projects

KUALA LUMPUR, Malaysia (AP), May 22, 2008 – Malaysian water utility Puncak Niaga Holdings said it has agreed to buy seven water and wastewater treatment projects in China for 29 million ringgit (US$9 million; 5.7 million) as part of its regional expansion. The projects will be transferred to a joint venture company being formed in Singapore, Sino Water Pte. Ltd., which will then invest up to 250 million ringgit (US$78 million; 50 million) to build and operate the projects, Puncak said in a statement. Puncak will hold 80 percent interest in Sino Water, with the rest held by Singapore water services firm, Environmental Holdings Pte. Ltd., it said. "Puncak intends to leverage on its expertise and experience in Malaysia to tap the vast opportunities and growth potential offered by the China market," Puncak said. The China projects, located in the provinces of Hebei, Henan, Shandong, Guangdong and Hainan, have concessions of up to 30 years each and will have a combined capacity of up to 750 million litters a day when completed within 5 years, it said. The projects are expected to generate revenue of up to 100 million ringgit (US$31 million; 20 million) a year, it said. Sino Water, which will be Puncak's vehicle to expand in China, will be seeking other water projects to add to its portfolio, it added.

Finance Ministry unit starts talks with Selangor’s water concessionaires

KUALA LUMPUR, Feb 18, 2009 — Pengurusan Aset Air Bhd (PAAB), a unit of Minister of Finance Inc, has started talks with four water concessionaires in Selangor to resolve asset acquisition issues before March 31, or face a 37 per cent increase in tariffs early April. National Water Services Commission chief executive officer, Datuk Teo Yen Hua, said the government has waited too long for the state government to buy over assets of the four concessionaires because of pricing issues. Under the Water Services Industry Act 2006, all water supply assets — water treatment plants, dams and pipelines — in Peninsular Malaysia must be transferred to PAAB. Previously, Selangor Mentri Besar Tan Sri Khalid Ibrahim said the state might face water shortages by 2014 unless it restructured the “inefficient, fragmented” water industry. Teo said moving forward, there would be no more concession agreement but the water industry would operate under a licensing regime. “We want to make it clear that these assets acquired by PAAB will still be leased back to the operator for them to operate. But since the cost of fund is lower and the tenure of repayment will be much longer, the pressure on tariff will not be as bad as currently faced,” he said. “All these restructurings must be concluded before end-March otherwise the tariffs will have to go up. If they can’t do it in time, it is only appropriate for PAAB, in the interest of the public, to start moving in to see how quickly we can resolve the issue.

Puncak Niaga rises most in a month

PUNCAK Niaga Holdings Bhd, Malaysia’s biggest water supplier by sales, rose the most in almost a month in Kuala Lumpur trading after a newspaper reported that the Selangor government will meet a March 31 deadline to take over its water assets. Puncak may be “prepared to sell their water assets if the state government offers them a fair price,” Kim Eng Research Sdn Bhd said in a report today. Recent water transactions have “implicitly valued” Puncak at RM6.70 a share, it said. Malaysia agreed last month to buy the water assets of Malacca state, the first stage of a nationwide takeover of regional suppliers that may cost the government more than RM15 billion (US$4.2 billion). The Energy, Water and Communications Ministry reportedly last month gave Selangor until March 31, 2009 to complete the consolidation and transfer the assets to the federal government. The government plans to buy all the water businesses in Peninsular Malaysia, which owe the federal administration more than RM7.9 billion, by the end of 2009, Energy, Water & Communications Minister Shaziman Abu Mansor said on December 17. Malaysia’s water companies are too indebted to spend the necessary money to improve the quality of services, the industry minister has said. - Bloomberg

Selangor water firms accused of greed

SHAH ALAM, Feb 18, 2009 - Selangor Menteri Besar Tan Sri Khalid Ibrahim has accused water concessionaires in the state of practising “pure greed” as his administration tries to rally public opinion behind its bid to acquire the private companies. Khalid says the water companies are greedy for refusing the state’s offer of RM5.7 billion. Under the 2006 Water Services Industries Act, all water assets in Peninsular Malaysia must be transferred to the Finance Ministry’s wholly-owned Pengurusan Aset Air Bhd (PAAB) before the agency restructures water supply in the state. The Selangor government already owns 80 per cent of the state’s treatment plants, dams and pipelines. The Malaysian Insider understands that PAAB has indicated it will be capping the deal to buy over Selangor’s water supply assets at under RM9 billion, meaning that the private companies will swallow the lion’s share of the deal. The private companies and the federal government hold all the cards as Selangor needs to complete the takeovers by March 31 to head off a possible water rate hike under the 30-year concession agreement between Syabas and the federal and state governments in 2005.

Puncak Niaga rolling in profits, spent RM11m on directors in 2007

Puncak Niaga, one of the main water concessionaires in Selangor, is making huge profits. The group had close to a billion ringgit in deposits, cash, and bank balances as at 31 December 2007 and a net current asset ratio of 1.2. In other words, very liquid. (Profits for 2006 were higher as there was a gain arising from the partial disposal of a subsidiary of RM206m in 2006.) Syabas, which is 70 per cent owned by Puncak Niaga, received a government grant of RM250 million (that’s our money) “solely for the purpose of financing the costs and expenditure of the non-revenue water” to reduce unaccountable water loss. The federal government also provided a support loan (current carrying amount close to RM80 million) to finance construction of the Wangsa Maju water treatment plant. It was originally repayable over 20 years (from 1999) at 8 per cent interest rate. But in 2004, the federal government “restructured” the loan: the interest rate was reduced to 3 per cent per annum retrospectively and the repayment schedule revised. How thoughtful. Having made super profits with the help of public money, Puncak Niaga is now asking for a higher price than what the Selangor government is prepared to pay (RM1.6 billion for Puncak Niaga and RM1.5 billion for Syabas) to nationalise water assets in the state. Note that Puncak Niaga paid out close to RM11 million in directors’ remuneration in 2007. These firms are rolling in profits - and yet, there could be a 30 per cent water tariff hike in Selangor from April 2009!

Water concessionaires reject Selangor govt’s offer

With the federal National Water Services Commission (Span) intervening and with the Malaysian Anti-Corruption Commission targeting Selangor MB Khalid Ibrahim, is it any surprise then that the private water concessionaires have rejected the Selangor government’s offer for the takeover of water assets? The interventions of these two federal-level commissions came just before the expiry of the Selangor government’s 20 Feb 2009 deadline for the offer to be accepted by the water concessionaires. Abbas and Splash have now turned down the offer. Puncak Niaga too. From the point of view of these concessionaires, why accept the Selangor government’s offer when you know that its position has been weakened by the actions of federal bodies - and when you know there is an alternative?

Privatisation failure spurs Selangor govt to take over water

Selangor is in the midst of crucial negotiations to take over the water assets of four concessionaires operating in the state. The negotiations are critical as Selangor residents are staring at a steep water tariff hike by end-March 2009 if the present situation persists. Private water distribution company, Syabas, 70 per cent owned by Puncak Niaga, had last year asked for a tariff hike by January 2009. In December, the Water Minister Shaziman Abu Mansor said that according to the concession agreement, water tariffs in Selangor and Kuala Lumpur would be hiked by up to 37 per cent in January 2009. This tariff hike was delayed to 31 March 2009 to allow time for the Selangor government to take over the water assets from the four concessionaires. In a Water Review Report by the Selangor government, it was noted that there was evidence that Syabas has breached key terms of the concession.

Puncak, Gamuda fall as Selangor bids to nationalise water

The Selangor government is attempting to take over the water assets from the concessionaires in the state, namely Puncak Niaga, Splash, and Syabas. The state government wants to nationalise the inefficient water sector - and prevent a 30 per cent tariff hike from April 2009. The concessionaires, on the other hand, are asking for a much higher price, based on discounted cash flow (of future profits) and future tariff hikes assuming the concession is allowed to continue. The three main concessionaires in the lucrative - and relatively easier - water treatment sector are:
* PUNCAK NIAGA - controlled by Rozali Ismail. It has 29 water treatment plants. Five water treatment concessions.
* ABASS - 55% owned by Selangor government’s KPS and 45% by Operasi Murni Sdn Bhd. Semenyih Dam and water treatment.
* SPLASH - 40% owned by Gamuda, 30% by KPS and 30% by the Sweet Water Alliance. Operates and maintains Sungai Selangor water treatment facilities.
The main company involved in the more difficult water distribution sector is:
* SYABAS - 70% owned by Puncak Niaga and 30% by Selangor’s Kumpulan Darul Ehsan Berhad (KDEB). 30 year concession agreement from 2005.

Malaysia Selangor water firms turn down state offer

Reuters - February 21, 2009 -- Malaysian water companies operating in the state of Selangor have turned down the local government's combined $1.56 billion bid to buy out their water assets, saying on Friday the offer lacked clarity. The offers, made to Puncak Niaga Holdings Bhd, Kumpulan Perangsang Selangor Bhd and Gamuda Bhd, were the state government's attempt to avert a water tariff hike of up to 37 percent beginning April 1. "There appears to be some inconsistencies in the offer ... and the unclear valuation method," Puncak said in a statement. Kumpulan Perangsang said in a separate statement it would seek a revised offer from the state government. Gamuda also issued a statement saying the offer "was not in line with generally accepted financial principles." Pengurusan Aset Air Bhd, a federal government agency, is expected to make a more generous offer for the assets as part of the federal government's plan to overhaul the water industry, analysts said. Selangor is the richest state in Malaysia around the capital of Kuala Lumpur and is controlled by the People's Alliance, the coalition that is the national opposition.

Malaysia's Puncak to reject water buyout offer - report

KUALA LUMPUR, Feb 14, 2009 (Reuters) - Malaysian water company Puncak Niaga is likely to reject a $444 million offer by the state government of Selangor to buy out its water assets, a newspaper reported on Saturday. Puncak Niaga said on Friday the Selangor state government was offering to acquire its wholly owned subsidiary Puncak Niaga Sdn Bhd (PNSB) and 70 percent-owned unit Syabas. Puncak Niaga is likely to turn down the offer because Pengurusan Aset Air Bhd (PAAB), a federal government agency, is expected to make a more generous deal for the assets, the Edge Weekly reported, citing an unidentified source. "Puncak will likely hold out for a better offer from PAAB," the Edge quoted the unnamed source as saying. Puncak Niaga officials could not be immediately reached for comment. The opposition-controlled Selangor state government had said the offer was aimed at derailing the federal government's efforts to take over the state water industry and impose higher prices. The federal government, via PAAB, has embarked on a plan to take over water assets in all states in an overhaul of the water industry.

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