GEORGE TOWN: Penang is open to a combination of financial packages to fund its new public infrastructure projects, Chief Minister Chow Kon Yeow said today.
Chow said this would include the recent proposal for the state to apply for a RM1 billion soft loan from the federal government, the initial announcement by his predecessor Lim Guan Eng to borrow money from the Export-Import Bank of China (Exim Bank of China) to finance the Penang Transport Master Plan (PTMP), as well as the reclamation of three islands to the south of Penang to finance the PTMP.
Chow said the idea for a soft loan had come from the SRS Consortium, the PTMP’s project delivery partner, following a change in the political environment, as the state wanted the Pan Island Link 1 (PIL 1) Highway project and the light rail transit project to proceed simultaneously.
“With a soft loan, the SRS can call for tender for the two projects simultaneously. But we are not sure if the federal government can give us the loan.
“If the soft loan cannot be obtained, we will have to go back to the same financial model, which is the reclamation of the three islands.
“We are still exploring all possible avenues. We do not want to rule anything out. It can be a combination of two or three financial packages,” he said today.
Chow was asked to comment on whether the state was abandoning the idea of borrowing money from China’s Exim Bank to finance the PTMP, with the RM1 billion soft loan proposal.
On whether the state has made a formal request for the loan, Chow said this has yet to be done, and pointed out that he had wanted to speak on it when debating the King’s royal address in Dewan Rakyat yesterday, but did not have enough time.
“We have to put in a formal application. We have written letters to get updates on our application (for project approvals), and we will follow up with a letter asking for this RM1 billion loan.
“We can look at several options. It is an alternative. Of course, if we can get good news from the federal government on the soft loan for us to start off the project, we can focus on that.
“But even as we speak, without project approvals, it is all very premature,” he said.
Penang is planning to reclaim three islands to the south to fund its RM47 billion PTMP, which includes tram lines, roads, highways and other modes of transport.
The Penang state assembly had, in May last year, passed a law, known as the Loan (Bank and Other Financial Source) Enactment 2017, to allow it to borrow money from a bank or financial institution to pay for new public infrastructure and other projects.
Lim, the then chief minister, had said that the enactment was primarily to allow the state government to borrow money from Exim Bank to finance the PTMP.
The more feedback the better, says Penang CM on Pan-Island highway