GEORGE TOWN: Penang Chief Minister Lim Guan Eng should explain if there was abuse of power or political interference in awarding a “relatively new small company” the RM6.3 billion tunnel-roads project.
Minister in the Prime Minister’s Department Wee Ka Siong was referring to a statement issued by the special purpose vehicle (SPV), Consortium Zenith Construction Sdn Bhd, set up for the project, in which it stated that it had not fulfilled the RM381 million minimum paid-up capital at the time the project was awarded.
Wee called it “one of the strangest statements issued by a company awarded a RM6.3 billion project in living memory”.
“The SPV also confirmed that it has increased its paid-up capital to RM26.5 million today, which is still below the RM381 million minimum paid-up capital to qualify to bid for the project but will ‘eventually’ reach RM381 million given enough time.
“Even more blatant is that the SPV said its RM26.5 million paid-up company today — which is more than the RM300,000 when they first won the RM6.3 billion tender — is sufficient to perform the RM305 million cost of the reports.
“Given these shocking admissions by the SPV company that it did not qualify for the RM381 million minimum paid-up capital and will eventually reach that amount given enough time, it is no longer possible for Lim to deny that procurement guidelines were not met.
“Given such revealing confirmation from the SPV today, not answering is no longer an option for the Penang chief minister,” he said in a statement today.
Wee was commenting on the statement made by the SPV, in which it said it is “well-capitalised” to undertake the RM305 million preliminary works for the RM6.3 billion Penang integrated infrastructural project, despite having a paid-up capital of only RM26.5 million.
The statement was issued yesterday to counter allegations against Zenith and the Penang government by federal ministers that the cost of the feasibility studies was exorbitant.
It said the feasibility studies and detailed design for the undersea tunnel plus the detailed environmental impact assessment for the road works showed it had the financial and technical strength to deliver on its commitments.
The Edge Financial Daily said Zenith’s previous shareholders included Beijing Urban Construction Group Co Ltd (BUCG), and although its stake was less than 1%, the consortium allegedly had a combined paid-up capital of more than RM500 million.
Zenith said the withdrawal of minority shareholders of the consortium, particularly BUCG, “which is purely a corporate decision”, did not impair the financial and technical strength of Zenith.
The 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.
The “three main 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).