KUANTAN, Dec 23 — The federal government has agreed to write off the Pahang state government’s debt of RM2.1 billion through the water services industry restructuring agreement, said Minister of Environment and Water (Kasa), Datuk Seri Tuan Ibrahim Tuan Man.
He said it involved rural area water supply debt amounting to RM1 billion while the balance would be transferred by novation to Pengurusan Aset Air Berhad (PAAB).
PAAB would build water assets in Pahang before leasing these to Pengurusan Air Pahang Berhad (PAIP), he added.
According to Tuan Ibrahim, the loan payment would be restructured for a period of 45 years at a competitive rate of three per cent for the existing assets and 4.5 per cent for new assets.
“PAIP will be given a moratorium on the lease payment for five years to help it build a strong financial base. This agreement also enables the people of Pahang to receive better water supply services, besides cutting losses due to loss of treated water.”
Tuan Ibrahim said this at a press conference after witnessing the signing of an agreement between Kasa secretary-general, Datuk Seri Ir Dr Zaini Ujang; Pahang state secretary, Datuk Seri Dr Sallehuddin Ishak; PAAB chief executive officer, (CEO) Abdul Hadi Ali and PAIP CEO, Saiful Zaini Mohd Bahari, here, today.
Also present was Pahang Menteri Besar, Datuk Seri Wan Rosdy Wan Ismail.
Tuan Ibrahim said Pahang was the eighth state to sign the agreement following seven years of negotiation that started in 2013, with Kedah and Perlis expected to follow suit in January.
Meanwhile, Wan Rosdy said the long negotiation period was to enable improvements to be made to several matters in the agreement as requested by the state government.
He said the agreement would enable the people in Pahang to enjoy more efficient and better treated water supply services in the future with the improvements to be made in stages.
Wan Rosdy said the 45-year period meant that the state government would not have to worry about coming up with a huge allocation to cover the maintenance costs of water assets as this would be under PAAB’s jurisdiction and hence, the money could be used to develop the state and improve the well-being of the people. — Bernama