‘Unusual payments’

> Terms for concession and timing raises questions, says works minister

PETALING JAYA: Works Minister Datuk Seri Fadillah Yusof yesterday alleged that “unconventional” methods were used to pay for Penang’s cross-channel undersea tunnel project.

He said it was unusual for the Penang government to award the project in 2013 because its construction will start in 2030 and both traffic and environment conditions could change by then.

He claimed that by using a pre-determined acreage of prime Penang seaside land based on today’s value, the Penang state government could well be overpaying for the construction cost when work on the tunnel starts.

“The value of the land could double or triple upon completion in 2037,” he said.

He also said that the concession model of fully paying the contractor to build the tunnel on fast-appreciating state land but still giving them a 30-year toll concession at the same rate of the second Penang bridge was unconventional.

“By doing this, the tunnel contractor will benefit from construction profits from building the tunnel and also from the potential appreciation of prime land from what it is valued today.

“They will also continue to benefit from collecting toll for another 30 years,” said Fadillah.

He said the deal was unlike standard concession agreements where a toll concession company funds the construction cost of the highway or tunnel and upon completion collects toll to repay their borrowings and make a profit.

Recently, the war between MCA and DAP heightened as claims have been made that the paid-up capital for the project’s special purpose vehicle did not match the amount stated by the Penang government.

MCA deputy president Datuk Seri Wee Ka Siong said Penang Chief Minister Lim Guan Eng had admitted that China Railway Construction Corporation Ltd was never a shareholder and after the withdrawal of Beijing Urban Construction Group from the project, the Penang state government awarded the RM6.34 billion project to a 82day old company.