Awaiting Sarawak’s response to RM1bn loan offer to rebuild schools

Finance ministry has imposed four conditions for RM1 billion fund to repair schools in a bad condition in Sarawak.

KUALA LUMPUR: The Sarawak government has yet to provide any official feedback to the federal government on the proposed loan offer, amounting to RM1 billion, which will be allocated for repairs of dilapidated schools in the state.

The finance ministry, in a statement today, said the federal government’s stand on the method of repairs for dilapidated schools in Sarawak had been explained to the Sarawak government during a meeting at the ministry on March 11.

This was followed by a letter dated March 20.

“In general, the federal government has agreed to partially accept the loan repayment from the Sarawak government, amounting to RM1 billion, which will be allocated for repairs of dilapidated schools in the state,” it said.

“The Sarawak government owes the federal government a total of RM2.375 billion.

“If the RM1 billion is repaid, then the Sarawak government will still owe the federal government a sum of RM1.375 billion.”

The finance ministry also explained that the proposal for the Sarawak government to utilise the loan repayment to repair the dilapidated schools was in fact advance money from the federal government because it involved funds previously lent to the Sarawak government.

According to the statement, if it is deemed to be a repayment of the loan to the federal government, it means that the RM1 billion fund is actually owned by the federal government to be used to repair schools in Sarawak.

The statement explained that this RM1 billion funding would be subjected to four prescribed legal mechanisms.

Firstly, the Sarawak government must repay RM1 billion from its total debt to the Federal Government Consolidated Fund, in line with the law and the Federal Constitution.

Secondly, the federal government will channel the same amount as allocation for use for projects to repair dilapidated schools in Sarawak.

Thirdly, the repair works of the dilapidated schools in Sarawak should be offered by open tender to ensure transparency and fair value, based on the current federal government financial arrangements.

Fourthly, the federal government is willing to take into account the views of the Sarawak government with regard to which schools should be given priority for repairs.