The PAS-led Terengganu government has sliced 92 percent off the state's debt to the federal government, reducing it from RM720 million in 1999 to about RM60 million within three years.

The government claimed it has succeeded in doing without levying road toll-charges and assessment rates, which it abolished when it took over the state, and despite being deprived of a share of the oil royalty.

The state budget report, released yesterday, records the reduction of debt and lends weight to PAS' rebuttal of allegations by the federal government that Terengganu will default on what it owes.

Zahari Muhammad, the press secretary to Menteri Besar Abdul Hadi Awang, said allegations by Deputy Prime Minister Abdullah Ahmad Badawi that PAS has managed the state badly are thus not true.

Premier-in-waiting Abdullah said yesterday that PAS should start proving it could run the state better than the BN. He was criticising Abdul Hadi's statement that the state government would withhold repayment of its loans to the federal government due to financial constraints.

He also charged that PAS was trying to divert attention from its own weaknesses by blaming the BN for the Terengganu's failure to repay its loans.