Penang gov't will use reclaimed land as collateral

GEORGE TOWN: The Penang government will use a portion of the land reclaimed to fund the RM27 billion Penang Transport Master Plan (PTMP) as collateral to take a loan from China.
Chief Minister Lim Guan Eng said nonetheless said any loan obtained from the country would need the okay from the Federal Government.
He said the amount of funds obtainable was also limited to the repayment period capped at five years.
"The loan period is for five years, how much can we borrow?" he asked in a press conference today.
The Penang government is now allowed to take loans after the state legislature passed the State of Penang Loan (Bank and Other Financial Source) Enactment 2017 last week.
The passage however has not gone down well with Penang Umno liaison committee chairman Datuk Seri Zainal Abidin Osman who was reportedly perplexed why the state needed to obtain loans from China.
Lim in response said borrowing from a country was different from taking a loan from a commercial bank.
He said loans obtained from a country would have a lower interest rate compared to commercial loans.
"The interest rate is cheaper than the market rate, this is good for us.
"This makes good financial sense as we can get a lower interest rate," he added.