Aliran Ihsan still in contract talks with Johor Govt

By Goh Thean Eu
gohtheaneu@nstp.com.my

December 14 2006

WATER treatment plant operator Aliran Ihsan Resources Bhd, linked to billionaire Tan Sri Syed Mokhtar al-Bukhary, is still in talks with the Johor State Government to extend its concession contract and to lower its tariffs.

It is learnt that water treatment tariff will be reduced by a double-digit percentage and Aliran Ihsan is looking to extend its contract by 17 years to 2029.

Chairman Datuk Mohd Feisal Ibrahim said the extension of the contract period is essential, as it will compensate the potential reduced earnings as a result of lower water treatment tariff.

"We hope that the talks will be completed as soon as possible," he told reporters after the company's shareholders meeting in Kuala Lumpur yesterday.

While waiting for the outcome of the negotiations, the company plans to grow earnings in the long and medium-term by seeking more big projects in the country, and overseas expansion.

"We are looking at playing a key role in the South Johor Economic Region (SJER) project.

"When the time is right, we will propose to the authority on taking part in the region's upstream and downstream business," Mohd Feisal said.

Besides SJER, the company is also looking at other opportunities in Johor Port and Port of Tanjong Pelepas.

As for overseas expansion, Mohd Feisal said it is looking at expanding into Indonesia as well as the Middle East, particularly Saudi Arabia.

"It is still in the preliminary stage," he said.

"If the opportunities arises and the conditions are right, we could venture abroad by early 2008."

On the outlook for the current financial year, he remains optimistic - as water consumption is expected to rise, and the company's water treatment plants can handle the higher capacity.

"I believe the Ninth Malaysia Plan will be a catalyst for added demand for water," Mohd Feisal said.

Aliran Ihsan owns 100 per cent stake in Southern Water Corp Sdn Bhd and 49 per cent in Equiventures Sdn Bhd.

Southern Water Corp has 14 water treatment plants, which has a combined capacity of 450.7 million litres a day.

Equiventures, which has two water treatment plants, has a combined capacity of 636 million litres a day.

On the establishment of the Water Asset Management Company (Wamco) by the Federal Government, Mohd Feisal said Aliran Ihsan has yet to decide whether or not to move into the new regime.

"We have a two-year grace period to decide on that," he said.