Penang CM defends plans to borrow from Chinafor projects

GEORGE TOWN: Penang is more than capable of paying back loans taken from a Chinese government bank, Chief Minister Lim Guan Eng said Friday amid criticism from the opposition on plans to borrow money for infrastructure projects in the State.Lim said the State Government's best financial minds had devised a proper financial model to repay the loan, which was intended to help finance part of the RM47 billion Penang Transport Master Plan (PTMP).

Penang is planning to reclaim three islands in the south to fund the PTMP, which includes the construction of tram lines, roads, highways and other modes of transport.

When asked how much the State Government intended to borrow, Lim said "a few hundred million".

"This is a five-year loan. How much can you pay in five years? This is a loan we can pay back within this period.

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"This loan ultimately needs the approval of the Federal Government," he said when met by reporters at the intersection of Prangin and Penang Road, Friday.

Earlier, Lim gave a briefing on the delayed refurbishment of a four-pronged pedestrian bridge sponsored by the IGB Corp. The renovated bridge, built at a cost of RM6 million, is expected to be completed by August.

Lim said Penang was the State with the lowest level of debt to the Federal Government at 0.4pc of RM17.7 billion, or RM64.49 million.

Currently, the State with the highest debt is Pahang at RM3.1 billion, followed by Sabah (RM2.8 billion) and Kedah (RM2.7 billion).

Lim said the loan offered by Exim Bank of China, showed that the Chinese government had full confidence in Penang to repay the loan on time.

"To have been offered this facility by the Peoples' Republic of China's (PRC) government bank is a 'pengiktirafan' (acknowledgement) to Penang.

"Exim Bank of China is not a commercial bank. It does not give loans to anyone. By giving us a loan, it is a vote of confidence in Penang.

"This is not a regular loan, this is a loan from the PRC. And it can be considered as a One Belt One Road initiative by the Chinese government," he said.

On Thursday, Lim proposed a state law to enable Penang to borrow money from banks and financial institutions.

It was unanimously passed.

However, Teluk Bahang Assemblyman Shah Headan Ayoob Hussain Shah told reporters the loan for the PTMP, specifically for its rail projects, may not be sustainable.

He said he was not against the taking of loans, but cautioned the State Government about this particular one.

He said many rail projects took years to break even, and the situation may not be any different for Penang.

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In an impromptu press conference with reporters, Shah Headan said he had intentionally refrained from voicing his objection at the state assembly when the loan enactment was being tabled.

"The opposition members did not dare to object then," he said, despite Lim asking why all BN reps at the state assembly had not objected or let their voices be heard during the debate session of the enactment.

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