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MOF: Sarawak has not officially responded to RM1 billion loan

Bernama

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The Sarawak state government has yet to provide any official feedback to the federal government on the proposed RM1 billion loan for use to repairs of dilapidated schools in the state.

In a statement today, the Finance Ministry said the federal government's stand on the method of dilapidated school repairs in Sarawak governed by four legal mechanisms has been explained to the Sarawak government during a meeting at the ministry on March 11, 2019, followed by a letter dated March 20, 2019.

“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 statement explained that this would be subjected to four prescribed legal mechanisms.

“At the same time, the Sarawak government still owes the federal government a total of RM 2.375 billion. If the RM1 billion is repaid, then the Sarawak government will still owe the federal government a sum of RM 1.375 billion,” it added.

The Finance Ministry also explained that the proposal for the Sarawak government to utilise the loan repayments 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 owned by the federal government, to be used to repair schools in Sarawak.

The ministry also explained the four prescribed legal mechanisms.

Firstly, the Sarawak government must repay up to RM1 billion from its total debt from the federal government into the Federal Government Consolidated Fund. This is in line with the law and the Federal Constitution of Malaysia.

Secondly, the federal government will channel the same amount as repaid by the state government 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.

Fourth, the federal government is willing to take into account the priority of the Sarawak government in determining the schools to be repaired.

- Bernama

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