Business

Tuesday October 31, 2006

New water tariff hike to help Puncak Niaga



PETALING JAYA: The new water tariff hikes will help cushion Puncak Niaga Holdings Bhd's expenditure to carry out works to reduce non revenue water (NRW) levels.

The company's share price shed 3 sen or 1.02% to close RM2.90 on Bursa Malaysia on Tuesday, following the Selangor State Government's announcement that the 15% tariff hike would take place on Wednesday.

This hike is indicated in a concession agreement signed between the state government and Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), which is 70% owned by Puncak Niaga.

Under the concession, Syabas is entitled to this tariff review upon achievement of certain key performance indicators, which includes NRW reduction.

It was reported on Oct 15 that Syabas was entitled to this tariff hike as it had successfully reduced NRW levels by more than 5% within a year.

It is also entitled to receive cash compensation that is due 90 days after the end of each quarter if it is not allowed to increase its tariff to the agreed level.

The government will have to provide compensation which will be for revenue losses between Jan 1, 2006 and the date of the tariff increase.

An analyst said despite a delay of 10 months on the implementation of this hike, it was expected as outlined in the agreement.

According to the agreement, the hike was to have taken effect from Jan 1 this year, but this was delayed due to an audit to confirm the reduction of NRW.

It was reported that Puncak Niaga had allocated a capital expenditure of RM10.7 bil for its 30-year water concession period.

As at Jan 1, 2005, the NRW level stood at 42.78% and had been reduced since then to 33.63% as at June 2006.  
PUNCAK :  [Stock Watch]  [News] 
PUNCAK 6 :  [Stock Watch]  [News] 
PUNCAK-N :  [Stock Watch]


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