CZC paid-up capital has ‘grown to RM26.5mil’

Contractor: Funding has to increase at building phase

PETALING JAYA: The main contractor of the Penang undersea tunnel project states its paid-up capital has grown to RM26.5mil, and that its capital funding has to be increased when the project enters the construction phase.

“Over-capitalisation at this stage will unnecessarily tie up our funds,” Consortium Zenith Construction Sdn Bhd (CZC) said in a press statement yesterday.

CZC, as the special purpose vehicle (SPV) of the tunnel project, said its current paid-up capital was sufficient to undertake the RM305mil preliminary work, which was the feasibility study, detailed design and detailed environmental impact assessment of the three-road component.

Since early this year, MCA deputy president Datuk Seri Dr Wee Ka Siong had raised numerous concerns on the project, among which was why the SPV did not meet the RM381mil minimum paid-up requirement during the tender process.

The statement said any decisions, arrangements and changes made by CZC after the award were purely based on commercial reasons and within the provisions and obligations set forth in the agreement signed between CZC and the Penang government.

It also confirmed that Zenith Construction Sdn Bhd has always been its single largest shareholder while China Railway Construction Corporation Ltd (CRCC) is the engineering, procurement and construction contractor from the time of the request for proposal submission until now.

“The earlier withdrawal of minority shareholders of CZC, in particular Beijing Urban Construction Group, is purely a corporate decision which does not impair the financial and technical strength of CZC,” it said.

In the middle of this month, Dr Wee took Penang Chief Minister Lim Guan Eng to task for publicly declaring since 2013 that CRCC was part of the SPV.

In response, Lim said that CRCC was only the main contractor and not a shareholder, adding that “whatever was said before October 2013 is not as important or relevant compared to the contractual agreement signed in October 2013”.

Dr Wee, however, said the Penang government had misrepresented the shareholding of the SPV by including CRCC in the set-up.