How Can Penang State Government’s Debts Triple If The Water Debts And Assets Amounting To RM655 Million Had Not Migrated To The Federal Government, When Penang Has Currently The Lowest Debts In The Country At RM65 Million And Is The Only State Without Any Outstanding Debt Arrears?
Minister in the Prime Minister’s Department Abdul Rahman Dahlan should take a crash course in accounting when he claimed that the Penang state government’s debts would have tripled if the Federal government had not intervened. How can Penang State Government’s debts triple if the water debts and assets amounting to RM655 million had not migrated to the Federal government, when Penang has currently the lowest debts in the country at RM65 million and is the only state in Malaysia without any outstanding debt arrears?
The numbers just do not add up. Abdul Rahman claims that if the RM655 million state debts had not migrated to the Federal government, the Penang state government debts would have tripled to RM2 billion, incurring an additional RM 1.4 billion debt! How and where the additional RM1.4 billion debts come from is not made clear when the state government present debt level is only RM65 million?
Therefore, Abdul Rahman should stop pretending to be stupid to claim that Penang’s debts would have tripled from RM655 million to RM 2 billion if there was no migration of assets and debts from Perbadanan Bekalan Air Pulau Pinang(PBAPP) to the Federal government. If so, kindly explain our present low debts, no outstanding arrears and that 7 other BN states who also carried out the similar migration of assets and debts like Penang, all currently had higher debts than Penang and also with large outstanding debt arrears?
The people of Penang, not Abdul Rahman Dahlan, will decide whether Penang got a fair deal, in approving the migration of assets and debts back to the Federal government. As Abdul Rahman Dahlan previously mentioned, as part of this deal the Federal government provided a RM1.2 billion grant to expand the Mengkuang Dam in Bukit Mertajam by four times.
Let history and Penang voters decide at the next general election decide whether the state government’s leadership is impressive or made a right decision in exchange for an expanded dam four times bigger, to ensure no water rationing and continual adequate water supply. Abdul Rahman said that the state government should not trade away its assets to either reduce debts or finance increased spending.
I want to give Abdul Rahman Dahlan a 7-point reply. One, the water debts were incurred by the previous BN state government and it is only fair to return those water debts to the BN Federal government. Two, the debts taken over by the Federal government was not for free, but in exchange for water assets surrendered by PBAPP, and now owned by the Federal government.
Three, the water restructuring deal, taking over of water debts and surrender of assets was not peculiar to Penang but also applied to 7 other BN states. And yet the debts of these other 7 BN states did not reduce by 90%, like Penang, nor did these 7 BN states pay up their outstanding debts on time. Is this not competent financial management?
Four, this water restructuring deal was imposed nationally and involved a surrender of state rights by the BN state governments before 2008. In 2005 there was an amendment to the Federal Constitution that put “water supplies and services” from the State list to the Concurrent List in the Ninth Schedule of the Federal Constitution. In other words, what was the sole state rights of states were ceded by BN state governments then to the Federal government, to be jointly shared.
Five, the Penang state government is the only state that did not have any outstanding debt payment arrears at end 2016. This is a stark contrast from Pahang and Kedah which had the highest arrears of RM1.087 billion and RM1.028 billion, respectively. Further, PBAPP had also paid on time and in full all the annual lease payments.
Penang state government and PBAPP had no help from the Federal government when all debt repayments were made on time, clearly proving that unlike other states we had the money to do so because we were well-managed with record annual surpluses since 2008. Penang managed to reduce its state debts by 90 percent to RM65mil by the end of 2016 and continue to maintain that percentage level.
Six, the Penang state government secured a RM1.2 billion grant to expand the Mengkuang Dam by four times as part of the deal. This was crucial to ensure adequate water supply and preserve Penang’s proud record of being the only state in Malaysian history without water rationing.
Seven, despite increasing our government’s expenditure for the benefit of the people by 3 times, Penang is still able to record annual budget surpluses. This contrasts with the Federal government that has recorded a budget deficit for the 18th consecutive year. It is again false of Abdul Rahman Dahlan to claim that the state government financed this increased expenditure through selling of state land.
The Penang state government had never owned much land. The state government had only sold 106 acres and this is intended to fund the building of the Affordable Housing programme. Again the previous BN state government sold 36 times more land than the present state government. Despite selling 36 times more land, they received less money than the present state government because unlike the previous BN state government. we conduct land sales by open competitive tender.
Clearly Abdul Rahman Dahlan is so insanely jealous of Penang state government’s remarkable success in being the only state in Malaysia to have zero outstanding debt payment arrears and the lowest debts. Could this jealousy be due to the Federal government debt incurring an astonishing increase of RM 147 billion in 5 years from RM 501.6 billion in 2012 to RM 648.5 billion in 2016?
LIM GUAN ENG