Guan Eng questions govt’s decision to cancel RM2b guarantee for Penang, accuses Tengku Zafrul of double standards

(MMO) – DAP secretary-general Lim Guan Eng today questioned and demanded answers from Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz as to why a US$500 million (RM2 billion) loan guarantee requested by Penang from the federal government was recently cancelled.

The former finance minister explained how the government guarantee was only requested to act as a guarantor for the Penang state government against a loan obtained from the Asian Development Bank (ADB), a requirement of ADB, for the Penang Light Transit Rail (LRT) project.

Lim then accused the government of practicing vengeful politics by blocking aid to states led by Pakatan Harapan.

“This instance of revenge politics is very obvious because if taken from the financial aspect, there is no reason why the government guarantee to the bank loan cannot be approved.

“Why did Tengku Zafrul, when he was CIMB Bank Berhad’s chief executive officer approve a RM1.5 billion direct loan to the Penang Development Corporation (PDC) in 2018, but as the Finance Minister refuses to approve a RM2 billion guarantee to the Penang state government?” Lim said in a statement.

The former Penang Chief Minister explained how a guarantee from the government for the RM2 billion would not even translate to funds coming out from the national coffers as the Penang state government are able to service its own loans.

Lim added how the LRT project is desperately needed by the state to alleviate traffic congestion and spur further development towards it becoming a modern state.

“Penang recorded exemplary results in its debt management with the lowest loans among all the states in Malaysia, with RM57.83 million in 2018. Assets meanwhile are worth around RM2 billion.

“It was based on these financial performances that the state government’s promise itself was sufficient enough to convince CIMB to approve a bank loan of RM1.5 billion to the PDC, which is wholly owned by the state government,” Lim said.

“We hope Finance Minister Tengku Zafrul can reconsider the decision to cancel the guarantee to ADB, based on the financial performance and the state’s ability to pay for the loan,” he added.