KUCHING: The Sarawak government provides sufficient allocation in its annual budget for repayment of federal loans.
The Chief Minister’s Office clarified yesterday that the amount owed by the state to the federal government stood at RM2.38 billion as at Dec 31, 2018.
It added that federal loans are paid in a timely manner based on repayment schedules as per stipulated in the agreement between the state and federal governments.
“In fact, Sarawak is one of the states which has no outstanding or arrears in loan repayment, and this has been reported by the Auditor-General in its annual report and presented to the National Treasury Council,” it said in a statement issued here yesterday.
The statement was in response to Finance Minister Lim Guan Eng’s statement on Sunday with regards to Sarawak’s outstanding loans with the federal government.
Lim appeared to have taken umbrage at a request by Minister of Tourism, Arts, Culture, Youth and Sports Datuk Abdul Karim Rahman Hamzah for Sarawak’s share of the tourism tax revenue, and questioned why the Sarawak government did not use it vast reserves to settle its debt with the federal government.
Meanwhile, the Chief Minister’s Office stated that in Sarawak’s case, the federal loans were obtained to finance the implementation of various projects under the Concurrent List which include water supplies, sewerage, industrial estates, housing and agriculture – mainly oil palm plantation which involves smallholders.
“It is a normal procedure as provided for in the Federal Constitution for the states in Malaysia to seek for federal funding whether in the form of grant or loan.
“The form of funding, whether in the form of grant or loan, would be based on nature of the projects i.e. as to whether the projects would generate revenues in the future (commercial value),” added the statement.