PENANG SEEKS RM5BIL FEDERAL GUARANTEE

GEORGE TOWN, May 25, 2009: The state government has proposed that a similar investment vehicle like the Terengganu Investment Authority (TIA) be set up in Penang.

Chief Minister Lim Guan Eng said he had written to Prime Minister Datuk Seri Najib Tun Razak to approve a RM5bil federal guarantee to finance the investment body to be called Penang Investment Authority.

He saw no reason why the request would be rejected since the Federal Government could guarantee RM5bil for TIA, besides making RM6bil available from financial institutions backed by future oil earnings from Terengganu.

“We are only asking for RM5bil. If TIA can enjoy such a privilege, why can’t they (Federal Government) do the same for Penang which also needs funds for infrastructure projects,” he said after receiving a Thai delegation from the Senate Committee of Foreign Affairs at his office in Komtar Monday.

TIA is the country’s first state-established sovereign wealth fund with an initial allocation of RM11bil.

Lim said the state, via the Penang authority, anticipated recurring economic returns from various economic investments in several sectors.

He said the returns would be channelled into strategic development and social projects related to healthcare, education, infrastructure and the knowledge economy to boost the living standards of Penangites.

“If the Federal Government can guarantee us RM5bil, the state government will raise another RM5bil to make it RM10bil as the Penang Sovereign Wealth Fund,” he said.

With the amount, he said Penang could carry out projects in infrastructure, education, communications, high-tech and other fields “to build a knowledge economy driven by the best and the brightest.”