Govt Cuts Pipeline Project Losses To RM3 Bln, Reallocates RM5 Bln To Water Projects -- Anwar
KUALA LUMPUR, Nov 3 (Bernama) -- The government has reduced its losses from the termination of the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects to RM3 billion by reallocating RM5 billion in loans to finance water supply projects in northern Perak and Penang.
Prime Minister Datuk Seri Anwar Ibrahim said an agreement between Suria Strategic Energy Resources Sdn Bhd (SSER) and the Export-Import Bank of China (CEXIM) to reallocate the RM5 billion loan was signed on Oct 30.
The funds will be used to finance the Northern Perak Water Supply Scheme, he said.
The agreement followed renewed negotiations initiated by Malaysia in 2024, as well as discussions with Chinese President Xi Jinping and Premier Li Qiang in 2025, Anwar told the Dewan Rakyat during Minister's Question Time today.
Last Friday, Anwar witnessed the signing of the agreement between SSER, a company wholly owned by the Minister of Finance Incorporated, and CEXIM to reduce the country's losses following the termination of the TSGP and MPP projects in 2018.
Providing further details, he said RM8.3 billion, or 88 per cent of the combined RM9.4 billion contract value, had been paid out by 2018, although reported physical progress on the two projects stood at only 13 per cent.
However, he said the reported progress figures had yet to be audited or verified.
Reviews also found that land matters and the feasibility of gas supply for the TSGP, as well as pipeline installation rights for the MPP, remained unresolved.
"This represents a very serious governance failure," he said.
Anwar said almost the entire contract value had been disbursed before work progress was verified, while both projects were eventually terminated in 2018.
The MPP was a 600-km petroleum pipeline project linking Melaka and Port Dickson in Negeri Sembilan to Jitra, Kedah, with a contract value of RM5.35 billion.
The TSGP was a 680-km gas pipeline project connecting the Kimanis Gas Terminal to Sandakan and Tawau in Sabah, with a contract value of RM4.06 billion.
Both projects were financed by CEXIM, which provided loans covering 85 per cent of their total value, with the Federal Government acting as guarantor.
On the benefits for Sabah, Anwar said the government would still channel nearly RM5 billion towards electricity supply and pipeline projects in the state to meet the needs of its people.
-- BERNAMA