PETALING JAYA: Former Penang chief minister Lim Guan Eng has slammed the finance minister for revoking the federal guarantee for Penang’s RM2 billion loan from the Asian Development Bank (ADB), saying the state has an excellent record in debt management, as pointed annually by the auditor-general.
He said the federal government and finance minister Tengku Zafrul Aziz should quit playing politics and accept the fact that Penang was the best fiscally managed state over the last several years, going by the AG’s observations.
He said Penang also had the lowest quantum of loans among all states at RM57.83 million in 2018, with assets valued at almost RM2 billion.
As such, the former finance minister said he was puzzled why Putrajaya suddenly backed out from guaranteeing a RM2.04 billion (US$500 million) loan to partly finance its RM9.5 billion LRT project.
“The LRT project is indeed needed to overcome the urgent traffic congestion that will affect the future rapid development of Penang in becoming a developed state.”
On Friday, Tengku Zafrul Aziz said the government would not guarantee the ADB loan, stating that it would increase the federal government’s commitment on operational and development expenditure.
In a statement today, Lim said the move showed that the Perikatan Nasional government was playing “politics of revenge and jealousy” by punishing states controlled by Pakatan Harapan.
“If the ADB is willing to provide such a loan, it is based on Penang’s ability to repay it.
“This policy of revenge 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,” added Lim.
The DAP secretary-general said that ADB would approve loans for projects if the applicant’s detailed assessment proved that the borrower is able to repay the debt, adding that it was clear Penang had a proven track record of this.
Lim also questioned why Tengku Zafrul approved a RM1.5 billion direct loan to the state-owned Penang Development Corporation (PDC) in 2018 when he was the CEO of CIMB but is now withdrawing just a guarantee for a RM2 billion.
“Until now, PDC has had no problems repaying this RM1.5 billion loan in instalments to CIMB,” said Lim.
“It is hoped the government will reconsider the decision based on Penang’s track record.”
He said Tengku Zafrul must know that when funds come from international bodies, like the ADB, they will be managed, administered and monitored professionally.
The first of its kind in the state, the 22km LRT project is expected to go through 19 stations, linking the city centre of George Town to Bayan Lepas in the south.