Penang Chief Minister Lim Guan Eng has demanded an explanation as to why Perwaja Terengganu's RM1.625 billion loan is being written off, as noted in the Auditor-General’s Report 2011.

NONE Citing the report, Lim said the government-linked company had not repaid the sum over a period of 14-17 years.

He was referring to the Treasury Department’s response to the auditor-general’s queries with regard to the loan status of government-linked companies as at the end of last year.

"How come Perwaja's loan is being written off when its shares are listed in Bursa Malaysia?" Lim posed at a press conference today.

"The amount is staggering! It gives a negative impression that when companies borrow money, it is better not to pay back as the loan can be written off. It also gives the impression that if we pay back the loan, we do not gain anything at all, so is it better for us not to pay."

According to the audit report, the process to write off Perwaja Terengganu's loan begun last year and is expected to be completed by 2027.

It also states that the restructuring, reorganisation and rescheduling of loans of 13 other GLCs are in progress, while five others have been issued reminders to make good their payment.

The companies in the list include UDA Holdings Bhd (RM287 million), Cyberview Sdn Bhd (RM280 million), Syarikat Perumahan Negara Bhd (RM223.4 million), Malaysia Venture Capital Management Bhd (RM220.91 million) and Indah Water Konsortium Sdn Bhd (RM165.58 million).

Penang has lowest debt

Lim also claimed that Penang has been "too straight" in repaying its loans which, as at the end of last December, stood at RM2.59 million - the lowest among the states.

Those smaller than Penang, such as Perlis have relatively higher sums to repay, Lim said, noting that it show “size does not matter".

Asked to comment on Kedah, which has the highest outstanding amount, Lim merely said, "Don't blame them, as the message is ‘you don't have to pay back’".