BN concerned about Penang finances over China loans

KUALA LUMPUR: Barisan Nasional (BN) expressed concern today about the management of Penang’s finances, after the DAP-led state government announced plans to take a loan from China for a massive transport project.

The BN strategic communications team claimed that the Penang government under the DAP has sold or traded away an estimated RM12 billion worth of state land and assets since 2008, excluding the South Island’s 4,500-acre land reclamation rights estimated to cost RM27 billion.

It also highlighted reported remarks from Penang state executive councillor Chow Kon Yeow last year that there was not much state land to sell anymore.

“YB Chow had also confirmed that the Penang Transport Master Plan (PTMP) project cost have surged from RM27 billion to RM46 billion ― raising greater concerns of how much more the Penang government will need to borrow.

“In light of the 500 per cent increase in state yearly administration spending, the depletion of state land and assets, the possible depletion of Penang’s state reserves of RM1.5 billion via a loan to PDC (Penang Development Corp), the Penang government must assure the public that it’s gamble will be worth it and will not put the state at risk which future generations of Penang people will have to bear,” said the BN strategic communications team in a statement.

Lim said last Monday that the state would not borrow more than RM1 billion from China and clarified that it would be a loan directly from the country, not from a bank in China.

The Penang chief minister said the loan, which would be for a period of five years, was to partially finance the RM27 billion PTMP, a transport project including an undersea tunnel, LRT lines, and highways.

The BN strategic communications team pointed out that Penang’s spending for this year was budgeted at RM1.35 billion, almost 500 per cent of that in 2008 at RM283 million when the DAP took over the island state.

“The state’s main development company Penang Development Corp (PDC) has also seen its profits drop from about RM75 million per year during previous years to just RM6 million in 2015.

“As a result, PDC’s cash and fixed deposits levels have dropped. This has led to the Penang government, via the Chief Minister’s office, to extend a RM609 million loan to PDC, where the Chief Minister is also the chairman, for the year 2017 ― possibly from state reserve funds,” said BN.

The federal ruling coalition said the Penang government had been selling off state land and assets to cover increases in annual operating expenses and urged the state government to disclose how much state land there was before the DAP took over the state, how much of it was sold or traded away, and how much remained.

The state government was also told to reveal the full details of the PTMP that BN said cost about RM28,750 per person in Penang’s 1.6-million strong population.

“Such details should include the partnership model, revenue and cost projections for both the development as well as the future operations of the PTMP assets such as the LRT ― given that most public transportation projects are frequently unprofitable,” said the BN strategic communications team, pointing out that the Penang island had a “relatively small” population of 700,000 people.

“Barisan Nasional is concerned that its prudent management of Penang finances and assets in the past may be irreparably damaged by the DAP government’s reckless spending and borrowing.”

Source: The Malay Mail Online

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