To punish state governments that do not service or pay up loans taken from the federal government by not allowing them to take any more loans is 'ridiculous', said an opposition leader today.

DAP secretary-general Lim Guan Eng was responding to the 'punishment' revealed by Energy, Water and Communications Minister Dr Lim Keng Yaik.

Expressing shock over the remark, Lim said: "Such punishment is ridiculous and will neither frighten any state government nor encourage them to pay up."

Keng Yaik revealed that state governments owed the federal government a total of RM7.5 billion in loans taken for water projects, with Kedah topping the list at RM1.18 billion.

Lim said the punishment was too 'light' and would prompt everyone to borrow money from the government.

Unfair approach

He said Keng Yaik wanted to get back the loans by passing the Water Services Industry (WSI) and National Water Services Commission Act (known by its Malay acronym Span) 2006 bills so that the government can take over water supply services of all states.

"Such an approach is inherently unfair to states that do not default and repay their loans on time, especially like Penang," he added in a statement.

Keng Yaik, he said, should instead take action to recover the loans as there are many ways to do so as provided by law and the Federal Constitution.

On the same note, Lim said this was among the reasons why DAP opposed the two bills scheduled to be tabled in Parliament by the minister next Monday.

The other reasons include: not in the nation's interest and the economic interest of consumers and contrary to the fundamental human right to affordable and available access to water.

Altogether, the opposition party listed eight other reasons as to why it opposed the bills.

Lim also noted the complaints from consumers, especially those from the Klang Valley, over dirty and contaminated water.

"How can we attract investor's confidence in our economic development if we cannot even guarantee regular supply of clean water?" he asked.

DAP calls for a full review of these two bills, he added.