GEORGE TOWN: The back and forth over Penang’s proposed undersea tunnel and three main roads project continued today, with MCA deputy president Wee Ka Siong posing more questions to Chief Minister Lim Guan Eng in another video today.
Wee is a civil engineer by training and is believed to have worked as an Environmental Impact Assessment and Traffic Impact Assessment consultant for more than a decade. He is currently a minister in the Prime Minister’s Department.
In the 11-minute video, Wee highlighted several points about the project, starting with the technical strength and financial capability of the special-purpose vehicle (SPV).
Wee said the RM6.3 billion project was awarded to a consortium due to its technical know-how and financial capability.
He said this was reported in the Penang state-run Buletin Mutiara newspaper in 2013, when the state government had awarded the project to the then Consortium Zenith-BUCG Sdn Bhd (now renamed Zenith Construction Sdn Bhd).
Wee said with the withdrawal of the China Railway Construction Company (CRCC) and the Beijing Urban Construction Group (BUCG) from the special-purpose vehicle (SPV), the technical know-how and the financial capability factors were now absent.
He said the original consortium once had RM4.6 billion in total paid-up capital, but after CRCC and BUCG left, it was only RM8.2 million.
BUCG (M) Sdn Bhd had applied to have itself removed as one of three partners in the larger Consortium Zenith-BUCG Sdn Bhd in September 2016 following a fatal crane incident in Kuala Lumpur in August the same year.
Lim had reportedly said at the time that the Penang government “did not want an irresponsible contractor to be part of the undersea tunnel project. So we will allow BUCG to opt out from the consortium.”
Wee said he was in “great shock” to learn that CRCC had recently said they “were never” involved in the project as a shareholder or developer from the get-go, as reported in The Star.
“Bear in mind that your state secretary said the consortium was selected (in the open tender) based on the evaluation of the financial and technical strength of the CRCC and BUCG,” he said, referring to the person who chairs the state tender committee and deals with open tenders.
Wee said the new consortium’s latest numbers show the SPV was only worth RM70.5 million.
He said according to a Companies Commission of Malaysia (SSM) search on Consortium Zenith Construction Sdn Bhd, the SPV comprised of Zenith Construction Sdn Bhd, Juteras Sdn Bhd, Kenanga Nominees (Tempatan) Sdn Bhd and Vertice Berhad as shareholders.
‘Where’s the agreement?’
Wee said that another startling finding was that the project was devoid of any actual official agreement, which left the parties in the project signing “memorandum of understandings (MoUs)” and “acknowledgement of commitments”.
“With documents akin to MoUs being signed, it was not legally binding, leaving the contractors with a choice to leave as they wished.
“So, in the event the SPV failed to pay the contractors, the contractors could ‘abandon’ the job with no obligations to complete their work,” he said, adding CRCC denying it was involved in the project meant it was not obliged to do anything as there was no agreement.
Wee said in order to have a legally binding document, approvals from the local authorities, such as the Department of Environment (DoE), must be obtained beforehand.
He said that was why no legally binding agreements could be signed in the first place.
“You (Lim) misrepresented a non-legally binding document as an agreement. Acknowledgement of commitment is just a MoU or a ‘letter of comfort’, not an agreement.
“The state government can only hold the SPV liable if they fail to complete the three major roads and undersea tunnel,” Wee said.
Recently, the Penang government said the CRCC remained the main contractors of the project and the project will carry on regardless of any change in shareholding.
The RM6.3 billion infrastructure project came under renewed scrutiny by the Barisan Nasional (BN) following a fresh probe by the Malaysian Anti-Corruption Commission (MACC).
Since then, the Penang government and BN had revived the issue, which was a hotly debated topic in Penang in 2013 and 2014.
The 7.2km undersea tunnel will connect George Town’s Pangkor Road and Bagan Ajam in Butterworth. It is scheduled to begin in 2023.
Its feasibility study, often a topic of contention between BN and opposition leaders, is now 92% completed. The Penang government had said the undersea tunnel was of low priority and could take off later, after the three main highways were completed.
The “three main roads” (formerly three paired roads) stretch from Air Itam to the Tun Dr Lim Chong Eu Expressway (5.7km), Tanjung Bungah to Teluk Bahang (10.53km), and Jalan Pangkor-Gurney Drive junction to Tun Dr Lim Chong Eu Expressway (4.1km).