Debt Unpaid: A Telltale Sign of Cash Flow Problem for GPS Government?


Is the GPS State Government having cash flow problem that it could not make the prompt repayment of RM350 million debt to the Federal Government to facilitate the allocation for the repair of dilapidated schools in Sarawak?

Background Facts

1.       For a start, it is the gross negligence and failure of duty of 56 years on the part of the GPS (previously Sarawak BN) that Sarawak today has more than 1000 dilapidated schools. 

2.       It is only after the PH took over the Federal Government last year that the GPS started making intense demand for a quick solution to the problem, demanding the PH Government to resolve the 56-year old problem within 1 or 2 years.

3.       It is impossible for the PH Government to resolve this problem in such a short time, especially given the trillion-Ringgit debt that the PH Government inherited from the BN Government which the GPS was part thereof.

4.       At the request of the State Government, it was then agreed that the State Government will repay RM1 billion of its debt to the Federal Government and that this RM1 billion repayment will be allocated for the repair of dilapidated schools in Sarawak. This additional allocation is a special allocation by the Federal Government in additional to the annual operating and development allocation for Sarawak.

5.       In fact, it is unprecedented that a debtor can tell its creditor that “if I pay you the money, you must use the money I pay you for my use.”  That is exactly what the Sarawak State Government is demanding.  It was supposed to pay the debt owed to the Federal Government, yet, it imposed the condition that the money paid to the Federal Government must be channelled and used for Sarawak.

6.       Despite such unprecedented and unreasonable condition of repayment, the Federal Government obliged, in the interest of the Sarawak students in these dilapidated schools.

After all the publicity by the GPS Government that it will come up with the RM1 billion repayment first and then for the Federal Government to use the money to allocate for the repair of the dilapidated schools in Sarawak, the State Government now is only talking about repaying RM350 million instead of the RM1 billion initially agreed.  Even for this RM350 million, the money is not forthcoming.

For a State Government who claims to have RM31 billion reserves, one would expect that there is no problem to come up with RM350 million at any time.  Yet, it seems that the Sarawak Government is now delaying the repayment of the RM350 million debt.  Why is the GPS State Government delaying the repayment? Is the GPS State Government having cash flow or liquidity problem to come up with this RM350 million?

PH Sarawak urges the GPS to expedite the repayment of the said RM350 million debt so that our rural schools can get the allocation without any undue delay.  This is an opportunity for the GPS to atone its sin of the past 56 years.

Otherwise, if GPS is finding it difficult to come up with the money, then there is truth in what Lim Guan Eng has said a month ago about the possibility of Sarawak becoming bankrupt it GPS Government continues with the way it spends the State’s money.


Chong Chieng Jen

Sarawak Pakatan Harapan Chairman