DAP government’s water debt burdens Penangites

 |Jan 3, 2017
Azizi Safar blasts the Penang DAP government for not telling the truth about the water debt that burdened Penangites.
Azizi Safar blasts the Penang DAP government for not telling the truth about the water debt that burdened Penangites.

The DAP-led Penang government has frequently trumpeted it’s “achievement” in reducing the state debt by 95% since taking over from previous Barisan Nasional (BN) administration in 2008.

But a political observer, Azizi Safar blasted the DAP government for hoodwinking the people by not revealing the truth about the water deal that transferred the state debt and water assets to a federal government body.

He said the DAP government had also failed to inform Penangites that through the water deal, it had transferred the burden of repayment of the federal water loan on to Perbadanan Bekalan Air Pulau Pinang (PBAPP).

Through the transfer of debts, he said the state government had actually burdened Penangites with a debt repayment for generations to come.

“The DAP government had hid all these facts from public knowledge merely to gain political mileage through cheap politics,” he said in a statement to Malaysia Outlook.

He pointed out that the previous BN had actually set aside RM126 million in a state ‘amanah’ (trust) account to pay back an outstanding federal water debt of RM655.24mil.

However, he said the DAP government closed the trust account in 2011 and transferred the money to a consolidated fund namely – Tabung Wang Disatukan, and recorded it as the state government revenue of that year.

“Why didn’t the DAP government use the RM126 million in the trust account to repay the loan to federal government or leverage on that for a shorter repayment period?” he asked.

Prior to that, the state government had signed a water restructuring agreement with the Putrajaya administration on June 2, 2011.

The water deal saw Penang’s outstanding debt of RM655.24mil owing to the federal government converted into a federal loan.

With that deal, state-owned water supplier, Perbadanan Bekalan Air Pulau Pinang (PBAPP) shouldered the loan repayment to Perbadanan Aset Air Berhad (PAAB), a federal government body under the Ministry of Finance.

The DAP government has actually changed the existing RM655.24 million debt into a 45-year annual lease loan where the PBAPP must pay RM14.56 million annually to PAAB for 45 years.

The repayment was RM14.56 million X 45 years = RM655.2 million.

“This DAP government failed to reveal this,” said Azizi, adding that the people of Penang were actually been burdened with the loan repayment.

PBAPP Water Assets

Pointing out that PBAPP was getting its money from water consumers in Penang, he said the water supplier had hiked the water tariff once and usage surcharge twice in the past five years.

“In short, Penangites are repaying the DAP government’s water debt in form of federal loan.”

Under the water deal, Penangites would repay the loan from 2011 until 2056, which means, said Azizi “even our great grandchildren will be burdened with the debt.”

“So when did the DAP state government manage to slice the debt?” asked Azizi.

He noted that prior to the 2011 water deal, PBAPP was only paying RM6 million annually for water asset lease.

But, after June 2011, he said the water supplier had been paying RM14.56 million lease annually to PAAB, a RM9 million leap in the company operating cost.

Last but not least said Azizi, the Penang government had been charging PBAPP RM12 million per annum for raw water drawn from Sungai Muda in mainland Seberang Perai.

All in, due to the water agreement, PBAPP operating cost went up about RM20 million per annum.

“That’s probably why the water supplier has hiked up water tariff and surcharges, to sustain its increased cost.

“So actually the DAP government did not reduce the debt. It has actually burdened Penangites with more debts,” said Azizi.

Related links:
Half-truths, half-lies hallmarks of Penang DAP government

Athi Shankar has been a journalist for past 30 years. He believes that democratic rights come with responsibility.