KUALA LUMPUR: The Selangor state government has not agreed to compensate Puncak Niaga Holdings Bhd the RM339 million that has been included by the latter in its quarterly results.

Menteri Besar Tan Sri Khalid Ibrahim said while it had not consented to Puncak’s subsidiary Syarikat Bekalan Air Selangor Sdn Bhd’s (Syabas) increase in water tariff, it had not considered compensating the company.

“The state government would like to stress that although these terms are included in the concession agreement between the state and Syabas, the terms are applicable only when the state gives its consent,” he said in a statement yesterday.

Khalid said in board meetings, Kumpulan Darul Ehsan Bhd (KDEB), the Selangor state government’s investment arm, had always stated that Syabas must get approval from the state to arrive at an agreed tariff.

He added that as there was no such “agreed tariff”, the question of compensation did not arise. Syabas is 70%-owned by Puncak and 30% by state-owned KDEB.

On Tuesday, Puncak posted a net profit of RM46.74 million in the third quarter ended Sept 30, 2009, up 275% from RM12.46 million a year earlier, while revenue rose 39% to RM494.17 million from RM354.89 million. Puncak shares closed three sen higher at RM3.24 yesterday.

In the notes accompanying the 3Q results, Puncak said an amount of RM339 million, being water tariff compensation for the first nine months of 2009 arising from the delay in water tariff revision, was included in its revenue.

It said the amount was based on Syabas’ best estimate of the compensation as provided under the terms of the concession agreement dated Dec 15, 2004 signed between Syabas, the federal and the state governments.

Puncak said the water tariff compensation had been submitted to the state and was currently awaiting payment.

It said the claim for water tariff compensation had been included as amount owing by the state government under trade receivables. Puncak’s trade receivables stood at RM610.33 million as at Sept 30, 2009.

However, yesterday Khalid said by including the compensation in its 3Q09 results, Puncak did not comply with the arrangement with the state.

He said therefore, it appeared that Puncak had “overstated” its profits and urged the company to take responsibility to its shareholders with regard to the state’s view.

“The state will not be responsible for Puncak Niaga’s overstatement of its profits as reported yesterday,” he added.

Khalid said the state was in the midst of negotiating with the federal government and the state’s water concessionares and hoped to come up with a solution that would give the people of Selangor, Kuala Lumpur and Putrajaya “the best value for money”.

The federal government via its unit Pengurusan Aset Air Bhd (PAAB) is currently conducting due diligence on all four Selangor water players to acquire their asset and liabilities. The due diligence is expected to be completed by month-end.

The four players are Konsortium Abass Sdn Bhd and Syarikat Pengeluar Air Selangor Sdn Bhd. The other two are Puncak and Syabas. PAAB aims to come to an amicable agreement with all four by year-end.