KUALA LUMPUR: The DAP-led Penang state government should cancel its water restructuring deal with the Federal government if it continues taking credit for the state’s debt reduction.
Barisan Nasional Strategic Communications director Datuk Seri Abdul Rahman Dahlan today said the debt reduction was due to efforts by the Federal government.
“In truth, the 95 per cent Penang state debt reduction was made possible by the federal government in a water restructuring agreement in the year 2011, when the Federal government had agreed to convert RM655.24mil of existing state debt to 45 annual lease payments of RM14.56 million.
“In the same agreement, the Federal government had also agreed to give a RM1.2 billion grant to the state government to expand the Mengkuang dam,” said the Kota Belud MP in a statement Tuesday.
He added that a “big proportion” of the funds had been disbursed to the state government.
Rahman, who is also Minister in the Prime Minister’s Department, said this meant that the state government’s allegation that it did not receive financial assistance from the Federal government was false.
“The Federal government does not discriminate against opposition-held states and have signed similar water restructuring agreements.
“Selangor had also benefited from a RM9.7 billion financial assistance package from the Federal government signed in the year 2015 while Kelantan also received similar financial assistance in 2016.”
The Selangor government is led by PKR, while Pas helms the Kelantan state government.
Yesterday, the 2016 Auditor-General’s report revealed that Penang and Selangor have the least arrears owed to the Federal government.
The report said Selangor had RM14.67 million in arrears, while Penang was debt-free.
Rahman also accused the Penang government of using Federal government assistance to “mislead” the people.
He said despite that, the Federal government will not jeopardise the water restructuring deals with the states.
“However, if the DAP-led Penang government still wants to claim credit for the debt reduction or accuse federal government of not assisting Penang, they should ask the Federal government to cancel their 2011 water restructuring agreement so that they can be honest to themselves and to the people.”
He said the Penang government can then take back the RM655 million state debt and repay the Federal government the RM1.2 billion grant.
“By doing this, the Penang state debt will no longer be reduced by 95 per cent. (The debt) will triple instead, but at least DAP and the Penang government can be honest with themselves.
“Alternatively, DAP should stop making such claims of state debt reduction and apologise to the people for repeatedly deceiving them repeatedly over the past few six years.”