Friday, August 23

Putrajaya accepts RM1 bln loan repayment from S’wak to repair dilapidated schools, insists state still owes RM2.375 bln

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The Ministry of Finance insists that the Sarawak government still owes as much as RM2.375 billion to the federal government. File Photo

KUCHING: The federal government has agreed in principle to partially accept the RM1 billion loan repayment from the Sarawak government which will be allocated for repairs of dilapidated schools in the state.

In a statement, the Ministry of Finance (MoF) said this would be subject to prescribed legal mechanisms.

MoF insisted that the Sarawak government still owes as much as RM2.375 billion to the federal government.

If the RM1 billion is repaid, it said Sarawak government still owes the federal government a sum of RM1.375 billion.

“The prescribed legal mechanism is like the following: Firstly the Sarawak government must repay up to RM1 billion from the total debt to the federal government into the Consolidated Fund of the Federal Government. This is in line with the provisions of the law and the Federal Constitution of Malaysia.

“Secondly, the federal government will channel the same amount as an allocation for use for the repair projects of dilapidated schools in Sarawak.

“Thirdly, the repair works of the schools in Sarawak should be offered by open tender, to ensure transparency and value for money based on current federal government financial arrangements (tatacara).

“Fourthly, the federal government is willing to consider the priority of the Sarawak government in determining the schools to be repaired,” the statement read.

The ministry also clarified that the proposal of the Sarawak government using loan repayments to repair dilapidated schools, was in fact like getting advance money from the federal government.

This is because it involved funds which was previously lent to the Sarawak government.

“If it is deemed as repayment of loans to the federal government, it means the RM1 billion are funds owned by the federal government itself, and to be used to repair schools in Sarawak.

“The federal government’s stand on the method of dilapidated school repairs in Sarawak as stated in the above four cases has been explained to the Sarawak government during a meeting at the Ministry of Finance on March 11, 2019 and followed by a letter dated March 20, 2019.

“However,until now no official feedback has been received from the Sarawak government,” the statement concluded.