Tunnel project given to 82-day-old firm

Wee: Company had weak finances and no track record

PETALING JAYA: The Penang government has awarded the RM6.34bil Major Roads and Tunnel project to an “82-day-old” company, said Datuk Seri Dr Wee Ka Siong (pic).

The MCA deputy president said this contradicted the state government’s previous claim that the special purpose vehicle (SPV) had a paid-up capital of RM4.5bil.

“This shows that the Penang government has misrepresented the shareholders of the Penang Tunnel company since CRCC (China Railway Construction Corporation) and BUCG (Beijing Urban Construction Group) have never been shareholders,” he said in a statement.

Dr Wee said on Nov 14, 2011, through a request for proposal (RFP), that the Penang government had awarded the mega project to the main shareholding company with a paid-up capital of RM300,000.

“In fact, at the time of the award, the Penang Tunnel SPV and its main shareholder only had a total com- bined equity of negative RM6mil as at Aug 31, 2013 – five months after the project was awarded.

“At the time, both companies had auditors expressing concerns over their operations due to its weak financial condition,” he said.

He also questioned the rationale of awarding the project to a new company with no track record.

“How did they manage to meet the RM381mil minimum paid-up to qualify for the project?” he said.

Dr Wee urged the Penang government not to divert the attention but answer the questions raised and reveal the RFP selection papers and minutes of the meetings.

“The person responsible should focus on how the company man- aged to qualify in terms of technical and financial aspects to show that there is no fraud or interference from any politician,” he said.

Yesterday, Penang Chief Minister Lim Guan Eng and Dr Wee made separate videos targeting each other.

Lim said he wanted Dr Wee to apologise for saying the CRCC agreement was not stamped.

Recently, Lim showed the front page of the stamped agreement, but Dr Wee pointed out that the part CRCC signed in that document was just an attached letter of commitment and that CRCC did not contract directly with the Penang state government.

Barisan Nasional Strategic Communications deputy director Datuk Eric See-To pointed out that this distinction was important.

“With BUCG and CRCC out of the picture as shareholders as well as the actual contracting partner with the state government, this means the Penang government essentially awarded a RM6.34bil project to a newly set-up company with a weak financial condition and no track record,” he said in a statement.

See-To also questioned why the Penang government was so lenient and protective of the SPV.

“Since the SPV had never or no longer meets the minimum paid-up capital, does this mean there was misrepresentation and that the RFP should have been pulled back?” he said.

In George Town, Lim said he wanted Dr Wee to clarify his statement that the agreement with Penang Undersea Tunnel engineer- ing, procurement and construction partner CRCC was not stamped.

“I challenge him to answer why he said it is not stamped. I have shown that the agreement is stamped,” he said in a video posted on his Facebook page yesterday.

He stressed that CRCC was legally engaged and had the necessary expertise and finances to see the project through.

The mega project came under the spotlight early last month when the Malaysian Anti-Corruption Commission arrested several key officials for suspicion of graft.

It includes the construction of a 7.2km undersea tunnel connecting Gurney Drive on the island to Bagan Ajam in north Butterworth.

There will also be a 10.53km North Coastal Paired Road from Tanjung Bungah to Teluk Bahang, a 5.7km Air Itam-Tun Dr Lim Chong Eu Expressway bypass and a 4.075km Gurney Drive-Tun Dr Lim Chong Eu Expressway bypass.