Chief Minister Lim Guan Eng (DAP-Air Putih) was grilled over Penang Development Corporation’s (PDC) recent RM609 million loan allocated under the state Budget 2017.
He was interrupted by the opposition bench several times on the matter during his winding-up speech.
Heading the onslaught against Lim was Muhammad Farid Saad (BN-Pulau Betong), who questioned why PDC, a financially stable state agency with many properties, needed a loan from the state government.
PDC was allocated RM609 million in loans to acquire more land in mainland Seberang Prai for future development.
Farid asked why PDC did not take loans from commercial banks if the need arose.
Lim said getting a commercial loan was cumbersome and funds would likely be disbursed over a longer period of time.
“Getting a loan takes time. We would need the finance ministry’s approval, approval for funds matching, and tie-in agreements.
“Giving a loan directly to PDC would be better and we can be assured of recovering the loan.
“This is not like a 1MDB-kind of loan, this is a loan we can recover,” Lim quipped, eliciting laughter from the backbenchers.
Farid also asked Lim why the loan repayment schedule to the state government was not stated.
Lim said the state government gave PDC the loan at an interest rate of 4%, with the repayment period to be “as short as possible, in stages”.
Farid however badgered Lim for the repayment schedule. Lim repeated “as short as possible”, to Farid’s chagrin.
Farid said it was most likely PDC would not be able to service the loan as its revenues had dwindled and suggested the loan handout be investigated by the state PAC.
PDC’s revenue before tax between 2008 and 2015 was RM276.86 million, compared to RM389.11 million between 2000 and 2007.
“I am afraid that PDC will be unable to repay the debt and get into trouble. It worries me. If you cannot give me the terms of the loan, then it is best PAC take a look at this,” Farid told Lim.
Lim said Farid had the right to refer the matter to the PAC if he so wished, and revealed that PDC had been given “up to eight years” to repay the loan.
“We are looking into the needs of PDC, I have said although we give them a period, if possible, we want it to be short… we give them eight years to repay, but we want it to be shorter,” he said.
Later, the 2017 Supply Bill was passed unanimously, while Deputy CM II Rashid Hasnon (PKR-Pantai Jerejak) filed a motion to condemn the violence against Rohingyas. The motion received full support as well.
The august house also passed the Pig Farming Enactment 2016, paving the way for enclosed farms; zero discharge; buffer zones and good animal husbandry practices to be adhered to. Fines of up to RM30,000 were listed as penalties for offences.
The enactment was passed with an unanimous vote.
The House was adjourned sine die at 1am.