12 April 2018

BN Selangor Press Statement

RM4.22 billion law suit: Is Selangor headed towards bankruptcy?

1.  On Monday, the owners of water treatment company SPLASH had filed a suit in court to claim RM4.22 billion against SYABAS to collect payments of unclaimed bills.  

2. Previously, SPLASH had said that since the Selangor Government took over full ownership, SYABAS had only been paying 36% of outstanding bills to SPLASH for the supply of water but still ask SPLASH to operate at above design capacity at 110%.

3. SPLASH had said that being forced o over-stress its equipment continuously will lead to further breakdowns and cuts in water supply. On top of this, SPLASH complained that the lack of payments also limited its ability to maintain its equipment as well as to pay outstanding bills to TNB.

4. As this is a legal claim for unpaid bills, the chances for success of SPLASH to win the RM4.22 billion lawsuit against SPLASH will be high. It's either you owe them money or you do not.

5. Since the Selangor govt fully took over, SYABAS had also been reporting massive annual losses every year. A check with SSM also shows that for the latest financial year ending 31 Dec 2016 and tabled on 30 May 2017, SYABAS registered a net LOSS for the year of RM1.19 billion out of a revenue of RM1.87 billion.

6. Also, the latest Auditor-General report for the year 2016 shows that under the second year since Azmin Ali became MB, the Selangor govt posted a deficit for the year of RM145mil compared to the consistent surpluses in the previous years under former MB Khalid Ibrahim.

7. To add to its woes, the Selangor Govt under Azmin had also signed to borrow as much as RM9.65 billion from the Federal Government in 2015 to facilitate its takeover of SYABAS and two other companies where much of this amount has been drawn-down.

8. As a citizen of Selangor, I note with increasing concern that the Selangor Government had kept completely silent that its SYABAS has been sued for RM4.22 billion for unpaid bills.

We would also want to know why SYABAS only paid 36% of its bills instead of the full amount as what the ordinary rakyat does.

9. If the Selangor Govt loses this RM4.22 billion suit, payment of these outstanding bills will completely wipe out our state reserves of RM3 billion and leave us in a negative position.

10. Selangor being a deficit state since Azmin took over as MB can ill afford to have its reserves wiped out - especially with another new RM9.65 billion loan that was just signed 3 years ago.

11. This leaves us with the worrying and valid question if the Selangor Govt is well on its way to becoming bankrupt.

GT Tan

MCA Petaling Utara Division Chairman

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