KUALA LUMPUR (Nov 8): The Trans Sabah Gas Pipeline (TSGP) will be funded by a soft loan of RM4.53 billion from the Export and Import (EXIM) Bank of China and guaranteed by the Malaysian government, said Minister in the Prime Minister’s Department, Datuk Seri Abdul Rahman Dahlan.
 
The RM4.53 billion constitutes the total cost of the project, Rahman Dahlan said in a statement today, refuting an allegation on social media that Prime Minister Datuk Seri Najib Razak had collateralised oil and gas blocks off Sabah to China for a loan of RM100 billion.
 
Abdul Rahman said the allegation has gone viral via Whatsapp service and other social media since yesterday afternoon, purportedly serving as a warning to Sabahans and Sabah elected representatives with regard to the project.
 
“To set the record straight, the owner-cum-developer of the TSGP is Suria Strategic Energy Resources Sdn Bhd (SSER), a company wholly owned by Malaysia’s Ministry of Finance, while The China Petroleum Pipeline Bureau (CPP) is the project’s engineering, procurement, construction and commissioning (EPCC) contractor.
 
“While the project will be funded by a soft loan from EXIM, 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,” he added.
 
The minister said with the Malaysian government’s guarantee in place, there is no need for SSER to collateralise any Malaysian oil and gas block to the Chinese.
 
He noted while land matter is strictly a state jurisdiction, the project would not proceed without the engagement and cooperation between the Sabah government and the federal government.
 
“(This) debunks the claim that the Sabah state government is not consulted and involved in this project,” Rahman Dahlan added.
 
Rahman Dahlan said materials, equipment and labour to build the pipeline are sourced from within and outside the country, similar to infrastructure projects such as the mass rapid transit (MRT) and East Coast Rail Line.
 
“With this key energy infrastructure project, Sabah would be able to move up the value chain and add value to local commodities and raw materials, thus reducing the state’s dependency on primary industries and creating employment for the people throughout the state and increasing their income levels,” he added.
 
The minister advised people to be wary of unverified news from unknown sources, which he said are meant to create discontent and distrust towards the government.