Disappointing that Guan Eng hasn’t responded to findings on CRCC

Dato’ Seri Wee Ka Siong

1. After more than a week, it is disappointing that Penang Chief Minister Lim Guan Eng has not replied to my findings that CRCC was paid only 5% or a little more than RM3 million since the contract signing and has since stopped work.

2. This is a serious issue as it means that the financially and technically strong CRCC and BUCG are no longer in the project. Additionally, among the 5 parties that Guan Eng had claimed to be in the Penang Tunnel project, Sri Tinggi Sdn Bhd is also no longer a shareholder while Juteras Sdn Bhd is found to be in winding up.

3. This means that out of the 5 initial parties, only Zenith Construction Sdn Bhd which was only 82 days old with a paid-up capital of RM300,000 when the pre-RFP was called is the sole remaining party in the Penang Tunnel SPV.

4. This means that the Penang Govt has essentially awarded a RM6.34 billion project to a 82-day old company with paid-up capital of only RM300,000. This would mean that the Penang Government’s RM381 million minimum paid-up capital requirement to qualify for the tender has never been met or is no longer met.

Why has the Penang Govt yet to review whether the Tunnel SPV still fulfills this minimum capital requirement?

5. Guan Eng had previously repeatedly defended the project as secure by claiming that CRCC is still the main contractor, Therefore, before Guan Eng continues his spinning and his blame game, he must provide proof that CRCC was paid more than RM3mil, when it made the last payment to CRCC and provide proof that CRCC has not stopped all work on the project.

6. Additionally, our findings show that CRCC was contracted for US$22mil (RM69mil then) to perform the detailed design for all 3 roads and the tunnel.

7. According to figures released by Penang EXCO Lim Hock Seng, detailed design costs constitute RM253.7mil out of the overpriced RM305mil worth of reports.

8. Since CRCC was supposed to perform this work that will cost the Penang Govt RM253.7 mil for only RM69 mil, then who benefits from the RM184.7mil in difference?

9. And since CRCC did not continue with doing the detailed design for the 3 roads and 1 tunnel, who ended up doing the work, was the work properly completed and was there any fraudulent inflation of claims from the Penang Govt?

10. Also, Guan Eng has never properly explained why does the reports for the 3 roads totaling 20km in length with construction cost of nearly RM2 billion cost RM208.754 million while the reports for the more expensive and complicated tunnel cost only RM96.248mil?

11. More shockingly, the reports for one of the roads of 10.5km with construction cost of RM377mil already cost RM120.4mil – more than the total M96.248mil cost of reports for the tunnel itself that cost RM3.5 billion to construct.

12. Can the Penang Government blame anyone if they come to the conclusion that this whole RM6.34 billion Penang tunnel and 3 roads project is one big scam designed to allow certain local interested parties to grab as much valuable Penang State land as soon as possible?

13. Certainly the contract terms are very lop-sided at the expense of the Penang people and I will reveal more as we go along.