KUALA LUMPUR: Penang Members of parliament called on the Finance Ministry to review its decision to withdraw a government guarantee for a US$500 million (RM2.04 billion) Asian Development Bank loan application by the Penang state government to partly finance its RM9.5 billion light rail transit (LRT) project.
Bayan Baru MP Sim Tze Tzin said the decision had the potential of causing a setback of five to six years before the project could commence.
"The delay would weaken investor confidence in Penang, especially the electrical and electronics sector (E&E).
"The construction of the LRT project would attract foreign investors, while the delay would give adverse impacts on the manufacturing sector," he said in a press conference at the Parliament building today.
He said the Asian Development Bank has done a detailed study before approving the project, saying that the Penang state government has the capacity to repay the loan.
Sim also lamented that the state did not get attention from the federal government under the 2021 Budget, and that Penangites were hopeful for the project.
"It's the least the federal government could do to, by helping development in Penang that would boost the economy," he said.
Meanwhile, Balik Pulau MP Muhammad Bakhtiar Wan Chik said the LRT project was aimed at alleviating traffic congestion in Penang and would cause it to worsen if it was delayed.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz had on Thursday said the decision was in line with the revised revenue and income projections for the country, as well as the government's focus to restore the economy, following the Covid-19 pandemic.
He said if approved, it would increase the federal government's commitment on operational and development expenditure, as well as other off-budget projects borne by the government such as the MRT Line 1 and 2 (RM71 billion), LRT3 (RM17.7 billion), the Pan Borneo Sarawak Highway (RM13 billion) and the East Coast Rail Link or ECRL (RM48.85 billion).
As of Sept 30, the total value of government guarantees stood at RM289.8 billion or 20.1 per cent of the country's Gross Domestic Product, he said.