Govt guarantees RM4.5b loan for Trans Sabah Gas Pipeline

PETALING JAYA: The government has guaranteed a RM4.53 billion loan taken to fund the entire cost of the Trans Sabah Gas Pipeline (TSGP) project, according to Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan.
“While the project will be funded by a soft loan from the Export and Import Bank of China, there’s no truth in the allegations that the loan amount would be RM100 billion and oil and gas blocks off Sabah were collaterised to China in order to secure the loan,” he said in a statement today in refuting a WhatsApp message making the claims.
The owner-cum-developer of the TSGP is Suria Strategic Energy Resources Sdn Bhd, a company wholly owned by the Ministry of Finance, while The China Petroleum Pipeline Bureau is the project’s engineering, procurement, construction and commissioning contractor.
Rahman also said,considering that land matters are under the state’s jurisdiction, it is also not conceivable for the project to go ahead without the engagement and cooperation of the Sabah state government.
“With this key energy infrastructure project, Sabah will be able to move up the value chain and add value to local commodities and raw materials, thus reducing state’s dependency on primary industries and creating employment for the people throughout the state and increase their income levels,” he said.
Meanwhile, Rahman said the RM14.31 million feasibility study for the Labuan – Menumbok bridge announced under Budget 2018 is critical to determine the technical feasibility and address the financial and economic appraisal of the project. The study will involve comprehensive data collection and engineering studies to develop the technical concept for the project. The scope will include evaluation of the risks involved, action required for mitigation measures and recommendations for a Private Finance Initiative (PFI) procurement model.
In 2010, a feasibility study was carried out by Universiti Malaysia Sabah, Universiti Sains Malaysia and Universiti Malaysia Sarawak which highlighted the need for the Labuan – Menumbok Bridge Link. However Rahman said, the feasibility study did not address the financial and economic appraisal of the project. The feasibility study was also very preliminary and insufficient to render itself for the development of possible PFI procurement models.