KUALA LUMPUR, Nov 3 — The government has reduced its losses from the termination of the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects to RM3 billion by reallocating RM5 billion in loans to finance water supply projects in northern Perak and Penang.
Prime Minister Datuk Seri Anwar Ibrahim said an agreement between Suria Strategic Energy Resources Sdn Bhd (SSER) and the Export-Import Bank of China (CEXIM) to reallocate the RM5 billion loan was signed on Friday (October 30). The funds will finance the Northern Perak Water Supply Scheme.
Speaking in the Dewan Rakyat during the Minister’s Question Time today, he said the agreement followed renewed negotiations initiated by Malaysia in 2024, as well as discussions with Chinese President Xi Jinping and Premier Li Qiang last year.
On Friday, Anwar witnessed the signing of the agreement between SSER, a company wholly owned by the Minister of Finance Incorporated, and CEXIM to reduce the country’s losses following the termination of the TSGP and MPP projects in 2018.
He added that RM8.3 billion, or 88 per cent of the combined RM9.4 billion contract value, had been paid out by 2018, although reported physical progress on the two projects stood at only 13 per cent.
However, the reported progress figures have not yet been audited or verified.
Reviews also found that land matters and the feasibility of gas supply for the TSGP, as well as pipeline installation rights for the MPP, remained unresolved.
“This represents a very serious governance failure,” Anwar said.
Almost the entire contract value had been disbursed before work progress was verified, while both projects were eventually terminated in 2018.
The MPP was a 600km petroleum pipeline project linking Melaka and Port Dickson in Negeri Sembilan to Jitra, Kedah, with a contract value of RM5.35 billion.
The TSGP was a 680km gas pipeline project connecting the Kimanis Gas Terminal to Sandakan and Tawau in Sabah, with a contract value of RM4.06 billion.
CEXIM financed both projects, providing loans covering 85 per cent of their total value, with the federal government acting as guarantor.
On the benefits for Sabah, he said the government will still channel nearly RM5 billion towards electricity supply and pipeline projects in the state to meet the needs of its people.
