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PETALING JAYA: Former Penang Chief Minister Lim Guan Eng criticized the Finance Minister for revoking the federal guarantee for Penang’s 2 billion ringgit loan from the Asian Development Bank (ADB), saying the state has an excellent track record in debt management, as noted annually by the auditor general (AG).
He said the federal government and Finance Minister Tengku Zafrul Aziz should stop playing politics and accept the fact that Penang was the best fiscally managed state in recent years, according to AG observations.
He said that Penang also had the lowest amount of loans among all the states at RM57.83 million in 2018, with assets valued at nearly RM2 billion.
As such, the former finance minister said he was puzzled why Putrajaya suddenly pulled out of guaranteeing a RM2.04 billion (US $ 500 million) loan to partially finance his RM9.5 billion LRT project.
“The LRT project is really necessary to overcome the urgent traffic congestion that will affect the rapid future development of Penang to become a developed state.”
On Friday, Tengku Zafrul said the government would not guarantee the ADB loan, and said it would increase the federal government’s commitment to development and operating expenses.
In a statement today, Lim said the move showed that the Perikatan Nasional government was playing on a “policy of revenge and jealousy” by punishing the Pakatan Harapan-controlled states.
“If the ADB is willing to make a loan of this type, it is based on Penang’s ability to pay it back.
“This revenge policy is so obvious because, from a financial point of view, there is no reason why the government cannot approve the guarantee based on Penang’s performance,” Lim added.
The DAP secretary general said that the ADB would approve project loans if the applicant’s detailed assessment showed that the borrower can repay the debt, adding that it was clear that Penang had a proven track record of this.
Lim also questioned why Tengku Zafrul approved a direct RM 1.5 billion loan to state-owned Penang Development Corp (PDC) in 2018 when he was the CEO of CIMB, but now only withdraws a guarantee for a RM 2 billion loan.
“So far PDC has had no problem repaying this 1.5 billion ringgit loan in installments to CIMB,” Lim said.
“The government is expected to reconsider the decision based on Penang’s record.”
He said that Tengku Zafrul must know that when funds come from international organizations, such as the ADB, they will be professionally managed, administered and monitored.
The first of its kind in the state, the 22km LRT project is expected to go through 19 stations, linking downtown George Town with Bayan Lepas in the south.
