LETTER | On the issue concerning the Penang undersea tunnel project, the doubts and controversies surrounding the equity structure and the amount of paid-up capital of the SPV are the root causes of the issue before us.
Unfortunately, despite the many press statements and conferences, they remain unsettled. The evidence before us are clear. The SPV has secured a 110 acres prime land approved for high-density luxury condominiums despite the many delays in the proposed project.
The SPV has further secured a 30-year concession to collect toll. The issue surrounding the tunnel concerns public interest and welfare. Hence, I shall continue to counter Penang Chief Minister Lim Guan Eng's accusations toward me and the BN government through facts and evidence. On your latest statement, I reply categorically as follows:
1. Lim said I and BN claimed there were corruption and kickbacks involving millions of ringgit to state government leaders but they barely mention them now.
Please point out which of my press statements or press conferences alleging involvement of kickbacks on this issue. I do not make wild claims out of thin air. What I have been doing so far is to raise reasonable doubts, backed by concrete documentary evidence, on the controversies and delay concerning the proposed tunnel project. This is a measure of checks and balances under democratic politics.
Corruption is a serious issue to be tackled, as do other forms of misconduct. We leave it to the relevant authorities such as the MACC to investigate whether the proposed project is tainted by any corruption or fraud. I am not in the position to comment on this matter.
2. Lim said: There was sabotage by BN leaders and me vis-à-vis the proposed project as evidenced by Liow Tiong Lai abusing his position in getting information from CRCC
If raising public interest questions is deemed sabotage by Lim, I am afraid that his DAP colleagues are sabotaging our economy and national development through their questions in the Parliament as well as other various occasions.
Next, as the proposed project concerns logistics and transport infrastructure which fall within the jurisdiction of the Ministry of Transport, it is logical for CRCC which unfortunately has been dragged by Lim into the controversies, to provide information to the minister of transport to assure the government and the public of their capability to finish other projects on time.
Furthermore, Lim has repeatedly touted CRCC’s commitment to the proposed project which has been delayed for about five years. Isn’t it reasonable for the minister to take proactive measure to assure the public that no such undue delay is expected for other projects by CRCC?
3. Lim again denied he once said that CRCC was a shareholder of Zenith Consortium.
The Penang government publication Buletin Mutiara March 2013 issue stated clearly that Zenith Consortium was a consortium of five companies, including the CRCC.
More importantly, it was because of the involvement of CRCC that the consortium can claim to have an RM4.5 billion paid up capital. Lim has on four occasions mentioned about this RM4.5 billion paid up capital. However, it was also Lim who later said any matters prior to the preliminary agreement signed in October 2013 should not be taken into account.
Since he wants to deny his own words, I then raised the Hansard of the Penang State Legislative Assembly dated Nov 29, 2013 paragraph 10 which clearly record Lim acting in his capacity as the chief minister informing the assembly that CRCC and Beijing Urban Construction Group have joined Zenith Consortium.
4. Lim said I claimed an apparel company is the main contractor for the proposed undersea tunnel project. However, the apparel company only acts as an investor in the project. Apparently, I myself admitted later that CRCC remains the main contractor.
First, I have never claimed Vertice Bhd as the main contractor for the proposed project. If I have, please prove it. What I said was the apparel company is involved in the construction of the proposed project. Secondly, I have never denied CRCC as the main contractor. What I am disputing so far is the rhetoric of Lim that CRCC is a shareholder of the SPV.
Moreover, in an exclusive with Nanyang Siang Pau dated Dec 13, 2017, the chairman of Vertice Bhd said that the company has the intention to contract certain construction works in the proposed project. From there on, I did an SSM search on the SPV which led to my subsequent questions on the composition of the SPV and its paid-up capital.
5. Lim said I claimed that state government leaders played a role in awarding the proposed project to Zenith Consortium. The proposed project was awarded on the basis of open tender led by a panel headed by the state secretary as well as other senior officials. On the contrary, there was no open tender for the RM55 billion East Coast Real Link. There is also no investigation into the ECRL contract by the MACC.
The state secretary is a career civil servant and it is his duty to implement the decision of the state executive council, menteri besar or chief minister. Is Lim suggesting the state secretary acted without instructions in this instance?
By Lim's standard, an open tender seems to mean an agreement signed in October 2013 yet he is unable to produce the feasibility study till end 2015 without any investigation and to date, no construction has ever started.
On the contrary, the East Coast Rail Link that spans across four states has begun its construction work. Furthermore, it is a government-to-government (G2G) project without the involvement of land swap or a profit development project by a private company.
6) Lim said I try to drag the Penang state secretary into a political fight, alleging that Zenith Construction Sdn Bhd’s paid-up capital has not reached the minimum RM381 million requirement when it won the bid in the open tender.
Does this mean that one can change the shareholder as one likes, without even complying with the minimum paid-up capital requirement as long as one manipulates any company as backing to raise the minimum paid-up capital required? So what is the purpose of setting this requirement?
Does the current SPV still fulfil the minimum paid-up capital requirement? With the SPV’s current financial strength, would it have won the bid at that time?
7) Lim said I said the contract is not stamped, especially the main contractor’s 'Acknowledgment of Commitment'.
On Jan 19, Lim presented an 'Acknowledgment of Commitment' from CRCC. I pinpointed the question of not having this single document stamped. As a result, he showed a stamped contract on Jan 25 conceding that the 'Acknowledgment of Commitment' was part of an agreement. So it is the same as being stamped, and even claimed that CRCC had signed two contracts.
However, even CRCC has officially declared that the 'Acknowledgment of Commitment' was just a supplementary document, and it was not signed with the Penang state government. Moreover, CRCC was not among the signing parties which signed the original agreement on behalf of the SPV.
8) Lim said I alleged that the 'Acknowledgment of Commitment' provided by the main contractor to guarantee the project’s completion is not legally binding, as it is only an annexe of the main contract.
The 'Acknowledgment of Commitment' is indeed an annexe, and therefore is not considered part of the contract’s main content. More importantly, the agreement was signed on behalf of the four companies within the SPV, which does not include CRCC.
When the current SPV signed the contract with a party, the other two companies were no longer accounted as signatories. While one company is winding up, is the stamped contract still valid? Why allow the signatories to be replaced arbitrarily, and when one signatory is replaced, is the contract still valid?
9) Lim said Wee Ka Siong alleged that CRCC is the only consultancy company.
When did I ever say that CRCC is the only consultancy company? What I meant was that CRCC was supposedly in charge of the main part of the detailed design report, but the contract for that work is only US$22 million. Then, for other companies which charged US$100 million, what kind of work are they responsible for? What are the charging standards?
10) Lying that the state government had already paid the contractor for the tunnel project.
Which contractor is Lim referring to? From his verbal explanation, have the “shareholders” CRCC been downgraded to a contractor? I have never mentioned that the state government should pay CRCC as the contract was signed between the SPV and CRCC.
Any payment made should only be to the SPV. It is illogical for the Penang state government to pay the contractors directly.
I have expressed that CRCC has received only RM3 million in payments from the SPV so far and it has not reached the agreed amount based on the work progress.
Penang has surrendered a plot of land to the SPV. How can Lim not question the payment made by the SPV to the main contractor? After all, he said the main contractor is a key person.
Moreover, if Lim is unaware about the payment made by the SPV to the contractor, this proves that the SPV is the one dealing directly with contractor all this while and not the Penang state government. So how is there such a thing as the Penang state government having lost contact with CRCC?
What logic can the Penang state government base on to sue CRCC and claim RM6.3b from CRCC if CRCC withdraws from the project?
In conclusion, MCA cannot simply allow these issues involving Lim Guan Eng to be let off as they involve the public interest. MCA insists that public interest comes first. This has always been and will always be MCA’s mission, history and duty.
The writer is MCA deputy president and minister in the Prime Minister’s Department.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.