KOTA KINABALU: Sabah Government still needs to rely on Federal loans, said the state Finance Minister Datuk Seri Masidi Manjun.
“This is because the implementation of development projects such as road construction, sewerage services, irrigation and drainage, and water supply typically involves high investment costs and the development of long-term strategic assets that directly impact public well-being and economic growth.
“For example, water supply projects involve large-scale infrastructure development such as the construction of water treatment plants, dam upgrades, expansion of distribution pipeline networks, and asset maintenance, which can cost billions of ringgit,” he said during his winding-up speech at the state legislative assembly.
He said the total federal loans that have matured and must be repaid amount to RM3.2 billion.
Masidi added that despite the high loan amount, the annual repayment is relatively low, with the Sabah Government repaying approximately RM220 million per year for matured loans.
“This means Sabah can accelerate development while benefiting from interest-free loans and extended repayment periods of up to 20 years for all water supply and sewerage projects.
“This directly helps ensure that projects can continue without burdening the state’s financial position or neglecting the needs of other development sectors.”
Masidi said the state government will also reduce dependence on federal loans by increasing its revenue through exploration and generation of new sources.
He added Sabah will focus on strengthening its financial position, among others, improving the efficiency of water utility management, including reducing non-revenue water (NRW), to enhance operational efficiency and increase returns in the water supply sector.
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