CMO clarifies status of federal loan by Sarawak govt

File photo for illustration purposes

KUCHING, Jan 7: The Chief Minister’s Office (CMO) today clarified that the RM2.38 billion the state owed to the federal government was being paid in a timely manner.

In a statement, CMO explained that the federal loans were obtained to finance the implementation of various projects under the Concurrent List, which includes water supply, sewerage, industrial estates, housing and agriculture (mainly oil palm plantation that involves smallholders).

“The federal loans are paid in a timely manner based on repayment schedules as per stipulated in the agreement between the state and federal governments. As at Dec 31, 2018, the total amount of federal loan owed by the state is RM2.38 billion.”

CMO said this in response to a statement made by Finance Minister Lim Guan Eng yesterday with regards to the state’s owings to Putrajaya.

CMO revealed it was a normal procedure as provided for in the Federal Constitution for states in Malaysia to seek federal funding, whether in the form of grants or loans.

The form of funding, whether in the form of grants or loans, would be based on the nature of the projects, ie whether the projects would generate revenues in the future (commercial value).

The statement also clarified that every year, the state government set aside sufficient allocation in its annual budget for repayment of the loans.

“In fact, Sarawak is one of the states that has no outstanding or arrears in loan repayment. This has been reported by the Auditor-General in its annual report and presented to the Majlis Kewangan Negara.”

Yesterday, Lim slammed state Minister of Tourism, Arts, Culture, Youth and Sports Datuk Abdul Karim Rahman Hamzah for requesting the tourism tax revenue.

Lim said the federal government had yet to distribute the tax revenue to any state, including Sabah.

Lim also said Sarawak should repay the federal government its RM2.5 billion debt instead of accusing Putrajaya of shortchanging the state of RM2.7 million in tourism tax revenue. He reminded the state government that RM50 million of the debt was overdue.

“Sarawak has huge reserves, why has it not repaid its debt to the federal government?” Lim asked. — DayakDaily