Menteri Besar Tan Sri Khalid Ibrahim said the proposed increase in tariff is unjustified because of the poor performance of the water concessionaire and the state will take it to court as a last resort.
Khalid said the state would first try arbitration, as provided for in the agreement, should higher tariff be approved.
“The company has breached conditions in the agreement including reducing non-revenue water and any decision to increase tariff is untenable.”
Khalid said the matter has been brought to the attention of the Minister of Energy, Telecommunications and Water together with a request for the concessionaire agreement to be terminated.
“No decisive action has been taken by the minister but there are indications Syabas will be allowed to be the licensee under a new restructuring plan, which is beyond the comprehension of the state government.”
Khalid added the decision goes against consumer interests and the original intention of restructuring the water industries in Malaysia.
Syarikat Bekalan Air Selangor (Syabas) is requesting a 31 per cent price hike under the concession agreement and a decision will be made by the Cabinet tomorrow.
Any increase may jeopardise the 20 cubic meters of free water currently enjoyed by consumers in Selangor.
The state government has been at loggerheads with the federal government over the restructuring of the water industries in Selangor.