Malaysia to redirect RM5 billion from cancelled pipelines to water projects
Anwar Ibrahim says an agreement with China Exim Bank will channel the funds into water supply schemes in Perak and Penang.
Malaysia expects to recover about RM5 billion tied to two cancelled Sabah pipeline ventures by redirecting loan funds towards water projects in Perak and Penang, Prime Minister Datuk Seri Anwar Ibrahim told the Dewan Rakyat.
Anwar said the arrangement was covered by an agreement signed on Oct 30 between China Exim Bank and Suria Strategic Energy Resources Sdn Bhd (SSER), which is wholly owned by the Finance Ministry. The money forms part of an RM8 billion loan taken for the Trans Sabah Gas Pipeline and Multi-Product Pipeline projects.
He said redirecting the borrowing would limit Malaysia’s loss to RM3 billion, a figure that includes RM1.5 billion already spent. Legal obligations and guarantees meant the country still had to service the loan despite the cancellation.
Anwar was answering Datuk Jonathan Yasin (GRS-Ranau), who asked about recovering money disbursed when construction had reached only 13 per cent completion. Anwar said the RM9.4 billion contracts had been awarded to China Petroleum Pipeline Bureau through direct negotiations, without a tender, on Nov 1, 2016.
The water works will include transferring untreated water from the Perak River to Bukit Merah Dam, improvements to the Kurau River and main canal, and treatment plants at Kerian and Boga, Anwar said.
The scheme targets daily capacity of 700 million litres for Perak, including its Kerian industrial belt, and 300 million litres for Penang. Another 500 million litres of raw water is intended for agricultural irrigation. Anwar said contracts would be put to open tender with Malaysian contractors required, an arrangement China had accepted.
