Kedah rules out private takeover of state water operator

New Straits Times

13 hours ago

ALOR STAR: Kedah Chief Minister Datuk Seri Muhammad Sanusi Md Nor has denied alleged plans to allow a private company to take over Syarikat Air Darul Aman (Sada) as the state's water supply operator.
Sanusi, who is also Sada chairman, said any such move was unrealistic as it is bound by licensing conditions and contractual clauses.
"It is impossible for this to happen as long as I and my colleagues are here. Sada cannot simply be handed over to another party. It is a company established under the Menteri Besar Incorporated to manage water supply services in the state.
"Sada is the licensed water operator under Section 9 of the Water Services Industry Act 2006. Any takeover attempt is unrealistic," he said during the second meeting of the third session of the 15th State Legislative Assembly today.
Sanusi (Perikatan Nasional–Jeneri) was responding to Azhar Ibrahim (PN–Ayer Hitam), who asked if the state government intended to allow a private company to replace Sada as the sole operator.
Azhar cited media reports on May 6 stating that Ranhill Utilities Bhd had met the state government to discuss strategic cooperation in utilities and infrastructure development.
Sanusi said Sada also remained the principal operator under strict provisions, including the Water Services Industry (Licensing) Regulations 2007 and under Sada's Constitution.
"However, as Kedah's water operator, Sada is always open to exploring strategic initiatives with other companies to address supply challenges, without altering its ownership structure," he said.
On water tariff hikes, Sanusi stressed that Kedah was not the only state facing such increases.
"The executive power for clean water supply lies with the Federal Government, not the state.
Under the National Water Services Commission (Span), all operators' licences and business plans are regulated by them.
"If Span finds that revenues cannot sustain debt repayments, it has the authority to take over. So when all state water operators applied for tariff adjustments, all of them have been approved.
"This is happening nationwide, not only in Kedah," he said.
He added that Sada's finances must reflect sufficient profit margins to service debts and improve infrastructure.
"We must record profits to repay debts. Our infrastructure is being upgraded, and at the same time, we want to ensure the state remains financially stable," he said in response to Bau Wong Bau Ek (Pakatan Harapan–Sidam), who had questioned the necessity of tariff hikes, noting that Sada had projected profits of about RM80 million this.