Sarawak does not owe Putrajaya RM2.375 billion


KUCHING: The Finance Ministry (MoF) has got it wrong when it said the Sarawak government owed the federal government RM2.375 billion, said Deputy Chief Minister Tan Sri Dr James Jemut Masing.

“Sarawak does not owe the federal government RM2.375 billion as the amount is what federal government owes the state by way of constitutional obligation to Sarawak.”

Masing said he believed that the Sarawak government paid the instalments as and when they were due.

“Strictly speaking, the Sarawak government does not owe the federal government any debt.


“The Ministry of Finance must understand the economics of constitutional obligation within the federated system.

“This is the second time, less than one month, that the MoF makes a financial mistake in its financial pronouncement,” said Masing.

MoF had said in a statement that the Sarawak government had yet to provide any official feedback to the federal government on the proposed loan offer, amounting to RM1 billion, which would be allocated for the repair of dilapidated schools in the state.

The statement yesterday said the federal government’s stand on the method of repairs for dilapidated schools in Sarawak had been explained to the Sarawak government during a meeting at the ministry on March 11.

This was followed by a letter dated March 20.

“In general, the federal government has agreed to partially accept the loan repayment from the Sarawak government, amounting to RM1 billion, which will be allocated for repairs of dilapidated schools in the state,” it said.

“The Sarawak government owes the federal government a total of RM2.375 billion.

“If the RM1 billion is repaid, then the Sarawak government will still owe the federal government a sum of RM1.375 billion.”

The finance ministry also explained that the proposal for the Sarawak government to utilise the loan repayment to repair the dilapidated schools was, in fact, advance money from the federal government because it involved funds previously lent to the Sarawak government.

According to the statement, if it is deemed to be a repayment of the loan to the federal government, it means that the RM1 billion fund is actually owned by the federal government to be used to repair schools in Sarawak.

The statement explained that this RM1 billion funding would be subjected to four prescribed legal mechanisms.

Firstly, the Sarawak government must repay RM1 billion from its total debt to the Federal Government Consolidated Fund, in line with the law and the Federal Constitution.