Penang assembly passes Bill allowing state to borrow from China bank

(MMO) – The Penang state assembly today approved the Penang Loan (Banks and Other Financial Sources) Bill 2017 which will allow the DAP-led government to borrow from a bank in China.

Chief Minister Lim Guan Eng when presenting the bill said the enactment was introduced to create a new law regarding the state government’s borrowings.

“I believe the bill which was prepared under the initiative and leadership of the state government is geared to provide an abundance of investment and spur socio-economic, and physical development for the welfare and prosperity of the people of Penang,” he said during the state assembly sitting here.

He said the state government signed a memorandum of understanding (MoU) with China Exim Bank on Dec 16, 2014, which would allow the state to take loans from the bank at any time, for agreed purposes.

He said the bill was required under legal requirements as recommended by Prime Minister Datuk Seri Najib Razak in his letter dated May 31, 2016.

“The prime minister said if the state government wishes to get a loan from China Exim Bank, a number of conditions set out in Article 111 (2) of the Federal Constitution must be looked into,” he said.

Lim said the amount of money borrowed under the bill was to finance the investment and implementation of the physical, economic and social development of the state as well as other related matters, including the Penang Transport Master Plan 2013-2030 (PTMP).

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