PENANG should consider setting up its own bank to facilitate the state’s RM47 billion transport master plan, said a Bersatu assemblyman.

Teluk Bahang rep Zolkifly Md Lazim said a bill should be tabled and a new enactment passed to allow the setting up of a state development bank.

He said the state government could issue state-guaranteed bonds to raise funds for the project, and the bank could facilitate the sale of the bonds to depositors.

“To set up the bank, a reserve of RM1 billion is needed, with the permission of Bank Negara Malaysia.

“The reserve can be raised with KLIBOR (Kuala Lumpur Interbank Offered Rate),” he said in a speech at the state legislative assembly this evening.

KLIBOR is an official indicator for Malaysia’s interbank money market. It is the average interest rate at which term deposits are offered between prime banks in the Malaysian wholesale money market.

The ambitious Penang Transport Master Plan’s (PTMP) existing funding model is through another ambitious plan, namely the Penang South Reclamation, to reclaim three islands off the southern coast of Penang island.

Land on the islands will be auctioned off to raise funds to pay for PTMP components, which include highways and light rail transit.

Additionally, the state government, in May last year, passed the State of Penang Loan (Banks and Other Financial Sources) Enactment 2017, allowing the state to take loans from the Export-Import (Exim) Bank of China for PTMP.

These decisions were made prior to the 14th general election, when Penang was a Pakatan Harapan state that faced difficulty in getting funding assistance from the Barisan Nasional federal government.

Zolkifly said given that the Penang Legislative Assembly was able to enact a state law allowing the state to borrow money from the Exim Bank of China, it can now look into a law allowing the state to set up its own bank.

“The House cannot say the federal government is unable to give funds, given the nation’s RM1 trillion debt. If there are funding or legal constraints, we should discuss to find a way out of the problem.

“If there is no law allowing the state to set up its own bank, then a bill can be tabled for a new enactment to be passed to allow for it,” he said, adding that laws are man-made. – August 8, 2018.