The Sabah assembly sitting yesterday approved an additional RM420.7 million for various expenses to ensure smooth administration of the state government.

However, Sabah Chief Minister Musa Aman ( right ) said RM148 million does not involve cash flow, but needed for accounting regulations.

"The amount that does not involve cash flow is for the purpose of adjusting the Advance Account involved in emergency work to repair damages to utilities and infrastructure facilities such as pipes and water plants, irrigation and drainage as well as train tracks," he said when tabling the bill at the Sabah assembly yesterday.

Musa, who is also state finance minister, said RM272 million of the additional allocation involved cash flow and a large portion, RM100 million was needed to accommodate equity investment in Innoprise Corporation, a state government subsidiary, for the Sabah International Convention Centre (SICC) project.

Meanwhile, he said RM47.7 million was needed to cover expenses to buy water, including payment of arrears to water concessionaires, while RM63.36 million was to cover outsourcing for operations of water plants.

"Outsourcing is done as it's cheaper than hiring permanent staff which will involve payment of an additional allowance and pension upon retirement," he said.

Also approved was an additional allocation of RM38 million for the estimated development statement this year.

According to Musa, from that amount, RM26 million would be borne by the Kumpulan Wang Negeri while the remaining RM11.4 million through federal loan.

"Additional funds from the Kumpulan Wang Negeri is needed to complete ongoing work and meet payments committed in terms of contract, for example to acquire land worth RM20 million, statewide, for state government projects which are and will be carried out and RM3.5 million for forest management projects tied to contracts under the state Forestry Department," he said.

Musa said extra allocation was also needed to pay for work which has been completed last year, namely the Additional Basic Infrastructure V12 Resettlement Scheme at the Kota Kinabalu Industrial Park for RM449,510 and three Socio-Economic Shop house projects in Pelantong, Beluran; Tenghilan, Tuaran; and Long Pa Sia, Sipitang amounting RM1.26 million.

Besides that, the Kreatif Arama-IT project under the Resource Development and IT Ministry requires RM377,420, while RM11.4 million provided under the federal loan is for the preparation of offsite infrastructure for two projects under KKIP Sdn Bhd, namely the Steel and Automobile Project and Power Supply Upgrade Project.

- Bernama