The first principle is to tailor our investments according to our resources. It is foolhardy to overreach and embark on mega projects that could be financially unviable and plunge the people of Penang, of this and future generations, into debt and financial distress. The Penang State Government’s budgeted revenue for 2016 is slightly less than RM700 million, yet it is planning to spend RM12 billion for the PIL and the LRT in the next six years for capital construction and it has not yet taken into consideration the yearly subsidies needed for O&M expenses that can run to hundreds of millions.
The Penang state government, since 2008 have prided themselves on their prudent and sound financial management, each year recording a budget surplus. "Since 2008, we have tabled a deficit budget, but taking into consideration our sound financial practice, increase in the collection & reduced arrears, prudent spending and also the practice of open tender system, I believe we can continue recording a budget surplus this year and also next year" - Chief Minister Lim Guan Eng, November 2015.
By withdrawing public funding from the PIL1, the state immediately saves RM6 billion in construction costs, plus the annual operating and maintenance costs that could run up to RM50 million (7% of revenue in 2016). The next step is to see how to cut down on costs for the public transport system, while achieving maximum coverage for the least investment.
The Penang state government’s budgeted revenue for 2016 is less than RM700 million