Press Statement By DAP Secretary-General and MP For Bagan, Lim Guan Eng in Kuala Lumpur on 30 November 2020:
RM2 Billion Federal Government Guarantee For Penang’s RM 2 Billion Asian Development Bank (ADB) Loan For Its LRT Project Is Small When Compared To Penang Previously Receiving Back 3% In Allocations From Its Yearly RM 7 Billion Tax Payments To The Federal Government.
The RM 2 billion Federal government guarantee for Penang state government’s reported RM2 billion ADB loan for its Light Rail Transit (LRT) project is small when compared to Penang previously receiving back 3% in allocations from its yearly RM7 billon tax payments to the Federal government. Instead of RM2 billion in direct allocations, this is merely a guarantee and at no risk to the Federal government, when the Penang state government has a proven track record of not defaulting of its debt obligations.
Further Penang’s sterling financial performance since 2008 is proven by having the lowest debts amongst all states in the country of RM 58 million. This compares with states owing the Federal government more than RM 3 billion and defaulting on loan repayments. Why is the Federal government willing to tolerate RM 3 billion in unpaid debts from “politically friendly” states as compared to Penang’s existing debts of RM58 million or even with the RM2 billion ADB loan guarantee.
ADB will only extend this RM 2 billion loan to Penang after carrying out rigorous and extensive due diligence exercise on the repayment ability of the Penang state government. Clearly Penang has passed this financial test based on its past financial performance since 2008. Further the LRT project is viable and needed to overcome traffic congestion in both Penang and Seberang Perai that impede economic growth prospects.
Failure by the Federal government to honour this loan guarantee without any financial justification is tantamount to political vengeance against the people of Penang. When PH was in power, states governed by PAS or BN were given financial assistance when they were unable to meet their operating expenses, including payment of civil servants’ salaries.
Despite PAS’ ideology of racism and religious extremism, I had approved RM100 million in emergency funds to Kelantan in my capacity as Finance Minister, to help Kelantan meet its operating expenses, including payment of civil servants’ salaries. In other words, Kelantan was practically bankrupt and could only pay its civil servants in 2018 and 2019 with Federal government assistance.
Separately, PH even honoured its promise of oil royalty payments by paying out RM400 million to Kelantan and RM200 million to Pahang. This was never done by the previous BN government. Unfortunately, the Kelantan government chose to purchase Mercedes Benz for its EXCO members instead of helping the poor in Kelantan. And yet PH and myself continues to be accused of being anti-Malay or anti-Islam by both PAS and BN as the beneficiary of this financial largesse.
Lim Guan Eng,
MP for Bagan.