Syabas breaches contract

PETALING JAYA (Jan 30, 2009): An audit of Selangor’s water concessionaire operations has revealed that the company had breached several important terms of the 30-year concession agreement, and the state government is using this to press for the lucrative contract to be terminated.

It is learnt Syarikat Bekalan Air Selangor (Syabas) – owned by Puncak Niaga (70% share) and state investment arm Kumpulan Darul Ehsan Bhd (30%) – had failed to comply fully with the requirement for contracts to be awarded on an open tender basis.

Sources said the audit showed that more than 72% of contracts worth a total of RM600 million were awarded to selected companies via direct negotiations and only 25% via competitive open tender, which clearly violates the agreement.

In addition, the audit also found more than RM325 million in discrepancy between the summary of contracts awarded in 2005, 2006 and 2007 and Syabas’s review document (referring to general accounts). [read more]

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