Penang’s debt reduction due to prudence, not water deal
Barisan Nasional politicians such as Najib Razak and Abdul Rahman Dahlan had asked the Penang state government to stop taking credit for reducing the state’s debt by 90% as the reduction was due to the federal-state water restructuring agreement. The minister has completely missed the point of the whole issue about Penang’s low debt. It is not about the one-off water restructuring transaction that benefited both the federal and the state governments. Rather, it is about the Penang state government’s prudence in debt management. Water deal was no free lunch First, the water restructuring agreement signed in 2011 was not a result of the federal government’s benevolence to the state. It was a solution to address the critical debt problem affecting the federal government and all the states in the peninsular. The collective water debt around the country in December 2007, before the signing of the first water deal, escalated to RM7.6 billion. The National Water Services Industry Initiative