Puncak Niaga not allowed to abstract raw water for treatment, so how?

10 March 2014

Puncak Niaga (M) Sdn Bhd had on 10 March 2014 received a faxed letter from Lembaga Urus Air Selangor (“LUAS”) that in line with the decision of the Selangor State Government on 12 February 2014, the water treatment concession companies in Selangor will be allowed to conduct raw water abstraction activities until the expiry of the existing raw water abstraction license on 31 May 2014, following which there will be no renewal of license thereof unless further directive is issued by the Selangor State Government.

20 March 2014

Puncak Niaga (M) Sdn Bhd (“PNSB”) had on 20 March 2014 filed an application in the Kuala Lumpur High Court for leave to issue Judicial Review proceedings against the decision of Lembaga Urus Air Selangor ("LUAS") and Selangor State Government as notified by LUAS to PNSB via a letter dated 7 March 2014 to not renew PNSB’s raw water abstraction licenses beyond 31 May 2014.

29 May 2014

The Kuala Lumpur High Court had at the hearing today, dismissed the substantive application for Judicial Review Proceedings filed by its wholly-owned subsidiary, Puncak Niaga (M) Sdn Bhd (“PNSB”) against Lembaga Urus Air Selangor and the Selangor State Government with costs of RM15,000.00 to each Respondent.

The Kuala Lumpur High Court had also dismissed PNSB’s oral application thereafter for a stay pending an appeal to the Court of Appeal.

Upon PNSB's instruction, PNSB's solicitors had filed a Notice of Appeal against the decision of the Kuala Lumpur High Court at the Registry of the High Court on even date.

1. On what grounds the water abstraction licenses were not renewed?

2. Will Puncak Niaga continue to operate its water treatment plants without raw water abstraction licenses?

3. Puncak Niaga has 42% of total water treatment capacity in Selangor. What will happen to the supply of treated water in Selangor?

4. Puncak Niaga has to choose whether to continue with the water treatment operation illegally without the licenses, or to default on the supply of stipulated amount of treated water as stated in the concession agreement. Isn't it a choice between bad and worse?

5. Was the non-renewal of the licenses done in bad faith to give grounds to the state government to takeover the operation of water treatment from Puncak Niaga? Isn't such a move an ultra vires government action?