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Tuesday, August 8, 2017

Guan Eng counters Rahman Dahlan's remark over state debts

Chief Minister Lim Guan Eng has countered Abdul Rahman Dahlan's remarkabout Penang's debts, telling the minister that the state has managed its finances competently.
He said the water debts mentioned by the Kota Belud MP were incurred by the previous BN government and it is only fair to return those debts to Putrajaya.
"The debts taken over by the federal government was not for free, but in exchange for water assets surrendered by the Penang Water Supply Corporation (PBAPP) and now owned by the federal government.
"The water restructuring deal, taking over of water debts and surrender of assets was not peculiar to Penang but also applied to seven other BN states," Lim said in a statement.
"Yet the debts of these other seven BN states did not reduce by 90 percent, like Penang, nor did these seven BN states pay up their outstanding debts on time. Is this not competent financial management?"
Lim was replying to Rahman who said today that the DAP secretary-general had previously admitted that the 95 percent reduction in Penang's debt was due to the federal government's assistance.
Rahman said this shows that the debt reduction was certainly not due to any "good governance" or the state's CAT (Competency, Accountability and Transparency) slogan.
This is because the Penang government's yearly operational expenses have now steadily grown over the years to become 500 percent higher of what it was in the year 2008, he had said.
But Lim reminded Rahman that the water restructuring deal was imposed nationally and involved a surrender of state rights by the BN state governments before 2008.
In 2005, there was an amendment to the Federal Constitution that put "water supplies and services" from the state list to the concurrent list in the ninth schedule of the Federal Constitution, he noted.
RM1.2 billion grant issue
Lim said the Penang government is the only state that did not have any outstanding debt payment arrears at end of last year.
This is a stark contrast from Pahang and Kedah which had the highest arrears of RM1.087 billion and RM1.028 billion, respectively, he added.
Lim said the PBAPP had also paid on time and in full all the annual lease payments.
Penang and PBAPP, he added, had no help from the federal government when all debt repayments were made on time.
"This clearly proves that unlike other states we had the money to do so because we were well managed with record annual surpluses since 2008. Penang managed to reduce its state debts by 90 percent to RM65 million by the end of 2016 and continue to maintain that percentage level".
Meanwhile, Rahman, who is also the state BN strategic chairperson, said Lim did not take into account that as part of the 2011 water restructuring agreement, the federal government gave Penang RM1.2 billion grant to expand the Mengkuang Dam.
Lim said Penang secured the RM1.2 billion grant to expand the Mengkuang Dam by four times as part of the deal.
This was crucial to ensure adequate water supply and preserve Penang’s proud record of being the only state in Malaysian history without water rationing, he added.
On Rahman's remark that Penang's expenditure had increased three times, Lim said despite this, the state was still able to record annual budget surpluses.

"This contrasts with the federal government that has recorded a budget deficit for the 18th consecutive year."
Lim said it was false for Rahman to claim that the state government financed the increased expenditure through the selling of state land.
"The Penang government had never owned much land and had only sold 106 acres, but unlike the previous BN administration, we conduct land sales by open competitive tender". - Mkini

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