KUALA LUMPUR, Nov 8 — Minister Datuk Seri Abdul Rahman Dahlan denied today claims that the federal government had collateralised oil and gas blocks off Sabah to China for an RM100 billion loan for the Trans Sabah Gas Pipeline (TSGP) project.
The minister in the Prime Minister’s Department clarified that the owner-cum-developer of the TSGP project was Suria Strategic Energy Resources Sdn Bhd (SSER), a company wholly owned by Malaysia’s Ministry of Finance, while the China Petroleum Pipeline Bureau was the project’s engineering, procurement, construction and commissioning contractor.
“While the project will be funded by a soft loan from the Export and Import (EXIM) 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.
“The loan amount would be RM4.53 billion which constitutes the total cost of the project and it would be guaranteed by the federal government. With the guarantee in place, there’s no need for SSER to collateralise any Malaysian oil and gas block to the Chinese,” Rahman said in a statement.
The Sabahan federal minister stressed that the project would not have been able to proceed without engagement between the Sabah state government and the federal government, as land was under state jurisdiction.
“Materials, equipment and labour to build the pipeline is sourced from local and foreign similar to other infrastructure projects such as the MRT (Mass Rapid Transit) and ECRL (East Coast Rail Line).
“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.