Sanusi, while welcoming Putrajaya’s proposal, insisted that the compensation should be in the form of funds for the state and not in lieu of costs for tree replanting projects and so on.

“The RM100 million per annum compensation rate is a reasonable one if we factor in the loss of income from forest products, and costs for maintaining the forests,” he said.

Sanusi added that the state government was making a “huge sacrifice” to preserve the Ulu Muda forest reserve as the Muda river that originated from the forest provided raw water for the irrigation of paddy fields in Kedah, Perlis, and Penang.

“Kedah contributes 43% to the country’s total rice production, which helps the federal government to save on costs of importing rice from overseas.

“In addition, the Ulu Muda forest reserve also provides water to Penang that abstracts 1,100 million litres per day, compared to 800 million litres per day by Kedah. Eighty per cent of water consumed by Penang daily originates from the Muda river,” added Sanusi.

Sanusi claimed not only did the Penang state government not pay a sen for water abstracted from the Muda river, it never replied to letters sent by his state government to discuss the matter.

Prime Minister Ismail Sabri Yaakob said yesterday Putrajaya would compensate state governments that maintained forest reserves as water catchment areas and protected them against illegal logging activities. He also said the amount of compensation would be studied by the relevant ministries.

“It may be something that can be discussed between the government and the menteris besar. We can sit down to agree on the compensation,” he had said at the launch of a digitalisation programme for small businesses.