Kota Kinabalu: The Federal Government, especially the International Trade and Industry Ministry (Miti), should consider the proposal to convert loans into grants for Federal financing of industrial parks under the Sabah Industrial Development and Entrepreneurship Ministry (MIDE).
Kalabakan Member of Parliament Datuk Andi Muhammad Suryandy Bandy, urged that starting from the 13th Malaysia Plan (RMK13), all Federal allocations are given as grants to industrial parks in Sabah.
“Secondly, the existing loans in industrial parks in Sabah until the 3rd Rolling Plan (RP3) of the RMK12 with a total loan value of RM273,519,585.97 (KKIP Sdn Bhd - RM261,849,585.97 and POIC Sdn Bhd - RM11,670,000.00) be converted into grants,” he said.
According to him, this proposal was made based on several justifications. Firstly, Sabah gets a large amount of investment value and this generates economic development and increases the value of the state’s Gross Domestic Product (GDP) and directly increases the national income and the value of Malaysia’s GDP.
“For example, Kota Kinabalu Industrial Park (KKIP) contributes as much as RM315 million a year to Malaysia’s GDP value and pays about RM75 million a year for Corporate Tax collection to the Federal Government,” he said.
For three years from 2019 to 2021, he said, this industrial sector was among the contributors to Sabah’s GDP with values in the year: 2019, RM 6.5 billion or 7.6pc of GDP 2020, RM 6.0 billion or 7.8pc of GDP 2021, RM 5.9 billion or 7.5pc of GDP
“Secondly, industrial parks in Sabah have created jobs and able to generate large-scale investment.
“At this point, KKIP has successfully attracted 300 manufacturing companies to operate with an investment value of RM 10.5 billion and has created a total of 18,031 job opportunities.
“Meanwhile, POIC Lahad Datu attracted 35 manufacturing companies to operate with an investment value of RM3.5 billion and has created 2,186 job opportunities.
“In addition, Sipitang Oil And Gas Industrial Park (SOGIP) has brought in the Petronas company to carry out operations with an investment value of RM 6.73 billion and has created as many as 450 job opportunities.
“Overall, the investment value of these three industrial parks amounts to RM20.73 billion.
“Therefore, looking at the positive development of these figures, I believe that the conversion of this loan status to a grant will help the industry in Sabah to be more advanced and competitive in focusing on attracting investors,” he said.
Thirdly, Andi said, the Federal Government should allocate grants to implement basic infrastructure in the industrial park areas in Sabah as well as in other states in Malaysia and not differentiate them considering that all the industrial park areas that exist in the country have the potential to contribute to growth national economy.
“The Sabah Government through MIDE has submitted a Proposal Paper for the Application to Change the Status of Loans to Grants for Federal financing in Sabah state industrial parks which have been presented online during the Socio-Economic Working Committee Meeting (JKSE) No. 2 of 2022 on September 1, 2022, and subsequently raised to the Special Council Meeting of the Malaysia Agreement 1963 (MKMA63) 5th time on September 8, 2022,” he said, when debating the committee level of the International Trade and Industry Ministry in the Dewan Rakyat, here, Wednesday.
Earlier, Andi who is also Sabah Assistant Industrial Development and Entrepreneurship Minister said under MIDE there are three industrial parks under its jurisdiction which are KKIP, POIC Lahad Datu and SOGIP.
However, he said, there issues that hinder the development and among them are constraints to develop basic infrastructure in industrial park areas in Sabah; and had to bear a high debt burden to the point of affecting proactive efforts to implement high-impact projects in driving Sabah’s economic growth.
“I have full confidence that if this existing debt burden is replaced by a grant from the Federal allocation, it will definitely boost the economic growth of Sabah which is more comprehensive in line with the goal of Sabah Maju Jaya (SMJ).
“It is hoped that due consideration will be made by the ministry,” he said, who is also Tanjung Batu Assemblyman.
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