BY TAN SIN CHOW
GEORGE TOWN: The state government’s decision to get a loan from a state-owned bank in China as “bridging finance” to carry out Phase 1 of the Penang Transport Master Plan (PTMP) continues to draw questions.
Penang MCA chairman Datuk Tan Teik Cheng questioned the state’s need to secure a loan from China Exim Bank.
“All the while, the state government was never in the picture as we thought SRS Consortium was the delivery partner tasked with carrying out the project.
“Out of nowhere, the state government got itself involved by asking for a loan from the bank in China.
“Is this necessary? If they succeed in getting the loan, how much is the interest?” he asked.
Chief Minister Lim Guan Eng said the state would have to provide about RM1bil while SRS Consortium, the project delivery partner, would bear the remaining RM1.3bil to fund construction of the Bayan Lepas LRT system and several highway projects.
He said many, especially the state Opposition, had questioned the need for securing a loan when it was widely reported that the PTMP would be funded through the sale of three new man-made islands off the southern coast of Penang island, amounting to 1,821ha in total.
“The land reclamation will take some time and the sale of the land can probably only start after two years. During this period, we need a ‘bridging finance’ to start the project.
“That’s where the bridging fund of RM2.3bil comes in,” he told a press conference in Komtar yesterday.
In an earlier report, Lim had said that the loan was primarily for the funding of investments and implementation of physical development, economic and social programmes for the state, including the PTMP and other related projects.
The RM17bil Phase 1 is planned for 2016 to 2023, of which two out of the three man-made islands will be reclaimed first.
Phase 2 is scheduled for 2023 to 2030 and will cost more than RM10bil.
On Penang’s reserve fund of RM1.6bil, Lim said they could use the money but it would be a risk.
“If you are left with nothing, what will you do if there is a contingency?” he said, adding that the interest rate from China Exim Bank would be lower compared to that of SRS Consortium which has pay higher commercial interest rates to banks.
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