THE Johor state government today did not rule out the possibility of foreign acquisition of state water utility company, SAJ Ranhill Sdn Bhd (SAJ Ranhill).

State Public Works, Rural and Regional Development Committee chairman Hasni Mohammad said a foreign company could be the majority shareholder of SAJ Ranhill.

“In terms of a commercial perspective, it is not something that impossible, it can be done,” he said in a press conference at the state assembly sitting.

He however explained that the state government still has control over the company, despite owning only a 20% stake.

“Like I said, it must be approved by the National Water Services Commission (SPAN). If they want to change the shareholding structure of the company, they must get SPAN’s approval,” he said.

He added that the state government could revoke the license through SPAN if the company is fully owned by foreign companies or unapproved parties.

He was asked to comment on concerns of a foreign takeover as the state government is only a minority shareholder of the water utility company. 

Hasni said state authorities would meet with SAJ Ranhill to discuss the steps to get a majority stake in the company.

However, he said the state government did not intend to acquire a majority stake through a “hostile takeover” approach.

He said the state will take into consideration proposals submitted by elected representatives who are asking the state government to increase their stock selection in SAJ Ranhill.

Meanwhile, Tengku Putra Haron Aminurrashid Tengku Abdul Hamid Jumat (BN-Kempas) urged the state government to take over SAJ Ranhill using government cash reserves.

“The state government has a cash reserve of almost RM4 billion and, therefore, is able to buy the shares in the holding company that has been awarded the Johor privatisation of Ranhill Holdings Bhd (Ranhill). It has been floated on the Kuala Lumpur Stock Exchange (KLSE),” Tengku Putra Haron said at a Johor 2018 budget debate today.

He said Ranhill owns an 80% stake in SAJ Ranhill, compared with the state government, which only has 20%.

He said foreign companies could sabotage Johor’s economy through the ownership of shares in the state’s water concessionaires.

“We must realise that, if the Johor water company falls into the hands of foreign companies through stock control, it will reveal to the possibility of economic sabotage by foreign investors.

“It is undeniable that we are headed towards becoming a Southeast Asian economic power. Therefore, we are vulnerable to various threats and competition from neighbouring countries.”

The Kempas assemblyman also said that there was “rumour claiming it was possible that SAJ (Ranhill) would supply water to the Forest City developer company”, which is estimated to use about 600 million cubic milliliter of water daily when the luxury annuity project is completed.

Tengku Haron Putra said this was equivalent to the water demand for the entire Johor Baru and Pasir Gudang areas.

“We do not want the people of Johor to face another water crisis in the state just for profit.”

According to him, the water crisis faced by Johor last year was due to the failure of SAJ Ranhill as the operator managing domestic water supply. –  November 26, 2017.