Putrajaya withdraws guarantee to finance Penang LRT

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The Perikatan Nasional (PN) federal government is not going to provide a guarantee for a RM2.04 billion loan application by the Penang state government for its light rail transit (LRT) project.According to a report by The Edge Markets, Putrajaya has decided not to grant a government guarantee for the loan, which is to partly finance the RM9.5 billion project.It quoted Finance Minister Tengku Zafrul Abdul Aziz (above), who said that the decision was in line with the government's revised revenue and income projections for the country."Any new loan with a government guarantee should be scrutinised as much as possible, as it will increase the government's contingent liability. Unchecked increases in the government's contingent liability could increase fiscal risks and affect Malaysia's credit rating given by international rating agencies."Therefore, it is…