Penang decided to go alone on RM27b project
Published on: Sunday, June 11, 2017
Penang: The State government did not approach the Federal Government for a loan to finance the Penang Transport Master Plan (PTMP).State Local Government Committee chairman Chow Kon Yeow said the administration, instead, decided to go ahead with a request for proposal to appoint a project delivery partner and signed a memorandum of understanding with China Export Import (Exim) Bank for a loan."We did not apply for the loan from the Federal Government.
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"We took the stand that we would not wait, so we went ahead with the request for proposal with the project delivery partner to help," he told New Straits Times.The RM27 billion PTMP project will see the construction of a light rail transit (LRT), monorail and three highways.It is expected to be funded by the Penang South Reclamation (PSR) project, which will see three islands reclaimed off the southwestern tip of the island.The recently-concluded state legislative assembly sitting had passed the Loan (Bank and Other Financial Source) Enactment 2017, which allows the state government to apply for loans from China Exim Bank for investments, implementation of physical development, economic and social development, as well as to implement the PTMP.
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Chief Minister Lim Guan Eng had said the five-year loan would act as a "finance bridging gap".Chow claimed that the Federal Government was happy with the state government's submissions related to the project, including the PSR project and loan, even during the early stages.
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Asked if the state government would still take the loan if the PSR project was rejected by the Department of Environment (DoE), Chow said the state government would not take a loan if the PSR project was rejected."To buy what, buy bicycle? The need for a loan does not then arise," he said.Chow also admitted that the state government could have waited for three years for the PSR to be completed before implementing the PTMP, as opposed to taking a loan from China Exim Bank."But, of course, the contractor appointed must also agree that if they reclaim the land, they will not get any payment first. If not, we also have to pay the reclamation cost, which runs into the billions... All these will be worked out later."We have an overall financial architecture, but the details are subject to negotiations later."(The details are) on how to ensure the land fetches the best price. There cannot be one unit price for all the lands. The price will be set depending on the land use, density and other factors. All these have to be worked out when the project is implemented," he said.Chow also said the public display of the PSR project's Environmental Impact Assessment (EIA) report had garnered positive responses from the public since its launch on May 24.Stay up-to-date by following Daily Express’s Telegram channel.
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