SABAH GETS SUBSTANTIAL AID AS WELL AS OIL ROYALTIES

Sabah gets substantial aid as well as oil royalties

23rd April, 2010

KOTA KINABALU: Even though the State only receives five per cent in oil royalties from Petronas, Sabah does in fact obtain other financial assistance from the Federal government that is largely from the national oil company’s revenue.

Chief Minister Datuk Seri Musa Haji Aman said under the Ninth Malaysia Plan, Sabah was among the states given the largest allocation at RM22.033 billion including an allocation under the Private Finance Initiative.

Periodically, it also receives special allocation for the Sabah Development Corridor amounting to RM1.277 billion, a special grant of RM1 billion and RM150 million under the Second Economic Stimulus Package.

Musa, the Minister of Finance, was speaking when delivering his winding up speech at the first meeting of the third term of the State Legislative Assembly Sitting here yesterday.

The State government is most satisfied with the assistance rendered by the Federal government thus far and pledges to continue the good working relationship between the governments to ensure greater financial allocation in the future.

Over the five-day sitting, several members of the assembly suggested reviewing the oil royalty given to Sabah.

Under the Petroleum Development Act 1974, all discoveries on petroleum and exclusive rights, power and privileges are placed under Petronas.

In return, the oil company has to pay cash to the Sabah state government annually equivalent to five per cent of the value of petroleum discovered and obtained from the State.

Musa added that the State government will continue proposing to Petronas to create industries related to oil and gas in Sabah.

Further, the State government will seek to secure a commitment from Petronas to increase investment in Sabah.

When responding to a query by Pantai Manis assemblyman, Datuk Abdul Rahim Ismail, the Chief Minister said the State government is progressively adding and increasing allocations for development every year.

Rahim had asked on the use of the State’s reserve for implementing more development projects in the State.

Under the Ninth Malaysia Plan, the state government set aside RM4billion for development while RM1 billion was allocated in the development budget for 2009-2010.

Musa is confident with such strong reserves, the State government will be able to increase allocations under the 10th Malaysia Plan for the period 2011 to 2015.

Sabah also received triple A ratings from the Rating Agency of Malaysia, which is the highest given by the agency whether to an entity or financial institution.

One of the State government’s achievements is to produce bonds worth RM544 million.

He said the AAA rating was a reflection of Sabah’s healthy state of financial affairs and a tribute to the State government as well as the people.

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“Adalah diharapkan dengan adanya sasaran-sasaran di bawah NKRA, masalah kekurangan infrastruktur asas luar bandar dapat ditangani secara berkesan di penghujung tahun 2010,”