KOTA KINABALU: Assistant Minister of Finance, Kenny Chua, has clarified that the Sabah state government has only RM1.6089 billion to spend while debts from federal loans and bonds for projects amount to a whopping RM3.8 billion.
The state’s financial position as of June 18, 2018 indicated that Public Funds totalled RM3.3054 billion.
From that total only 48.7% or RM1.6089 billion belongs to the Sabah state government for the Consolidated Revenue Account.
The remaining 51.3% or RM1.6965 billion is held in trust for the Consolidated Trust Account and therefore cannot be spent by the government.
At the recent State Assembly Sitting on Thursday, the Luyang assemblyman, Phoong Jin Zhe, had asked Chief Minister, Datuk Seri Panglima Hj Mohd Shafie bin Hj Apdal for the current financial position of the state government.
In his reply at the Assembly Sitting on Thursday, the Chief Minister who also holds the Finance Ministry portfolio said the state government has no arrears in loan payments to the federal government and is looking into how best to settle the RM1 billion bond that is due to be paid in full when it matures on 9 December 2019.
The state government’s liabilities consist of loans from the federal government which total RM2.871 billion and issued bonds at RM1 billion.
However, there is sufficient working capital to sustain necessary daily expenditures, said the Chief Minister.
The state government has allocated RM150.7 million annually for loan payments to the federal government over a period of 20 years at zero interest rate for loans that will be used for projects that benefit the people such as water supply and sewerage management; and at 4 % interest rate for commercial projects secured by KKIP Sdn Bhd and Saham Sabah Bhd.
Further, the state government will continue with efforts to claim 40% of Sabah’s nett revenue from the federal government as a special grant for the state in line with Sabah rights under the constitution.
The Chief Minister said the matter was being studies and if necessary, the previous Sabah State Special Grant Review Committee will be revived to enable negotiations between the state and federal governments to resume.
The state government will also continue to negotiate with the federal government to review oil royalties for it to be increased from 5% to 20%.