SARAWAK has yet to reply to Putrajaya’s proposed mechanism for the repayment of RM1 billion in loans, to be used to repair dilapidated schools, said the Finance Ministry.

It said the mechanism was explained to a state government representative at a meeting on March 11, and in a letter dated March 20.

“However, until now, no formal feedback has been received from the Sarawak government,” the ministry said in a statement today.

Putrajaya has agreed in principle to Sarawak’s proposal to repay part of its debt to the former, so that the funds can be channelled towards repairing rundown schools.

The ministry said the proposal has to comply with the prescribed legal mechanisms.

One condition is that Sarawak must deposit the RM1 billion into the federal government’s consolidated fund, “in line with the provisions of existing laws and the federal constitution”.

Once the amount had been received, Putrajaya will channel the funds as an allocation to repair the schools.

Open tenders for the repair works are a must “to ensure transparency and value for money”, based on Putrajaya’s current financial policy, said the ministry.

The federal government will also take into consideration Sarawak’s list of schools that should be prioritised.

Chief Minister Abang Johari Openg last year offered to loan RM1 billion to the financially strapped Putrajaya for the repair of the schools.

The Finance Ministry rejected the offer, saying the sum should be considered as a partial repayment of the state’s federal loans, which total RM2.37 billion.

The state government baulked at the proposal, citing concerns that there is no guarantee that the repaid funds will be used for school repairs.

Today, the ministry said the RM1 billion is actually an advance repayment of Sarawak’s loans, therefore, it is considered federal funds.

“It means that the RM1 billion is, in fact, the federal government’s funds, to be used to repair Sarawak schools.” – July 6, 2019.