China firm BUCG to take on RM8bil Penang road project

It’s official... China construction powerhouse Beijing Urban Construction Group (BUCG) will take on the controversial RM8 billion integrated road project in Penang following its winning bid submitted last year.

Penang Chief Minister Lim Guan Eng said the company - which will tie up with a Kuala Lumpur-based agent - will call the joint venture Consortium Zenith BUCG Sdn Bhd, to carry out the projects.

The revelation concludes months of speculation on BUCG’s involvement as the project proponent, especially since the 2011 memorandum of understanding (MoU) between Penang and the company, before the Malaysian and Chinese premiers.

“There is not going to be any cash exchange. It is only a land swap deal where 110 acres of land have been offered to them.

“The Tanjung Pinang land procurement was part of an agreement between E&O Bhd and the previous state government to release that piece of reclaimed land. We are simply maximising this opportunity with BUCG,” Lim said.

In lieu of cash payment, traffic volume and toll collection, Lim said BUCG would be allowed to collect toll from only the third link during its 30-year concession period.

Unfortunately, it would also have to bear any losses should there be a lack of usage by motorists, he said.

“In our offer, we specified that only the tunnel route could be tolled but the other three road projects will not have tolls. The rate should also be the same as the Penang Bridge II.

“We also informed them that the 110-acre land would only be released in stages beginning with the completion of the feasibility study and final implementation of the project,” Lim said.

On when the contract between Penang and BUCG would be signed, he replied “in the next few months” as the project involved “billions of ringgit” and there were a few things that needed to be finalised.

“We need to discuss further before the deal is signed. The tender has been awarded to them but anything can happen during this period... whether it goes on or not before the deal is sealed. Nevertheless, in principle we have agreed to it.

‘Upholding principle of transparency’

“The company chairperson Zarul Ahmad Mohd Zulkifli accepted our offer on Feb 7,” Lim told a press conference, adding that the announcement on BUCG’s winning bid was to show that the state upheld its principle of transparency.

Lim added that the open tender committee chaired by state secretary Farizan Darus made the recommendations to the exco after reviewing all four submissions following a request for proposal (RFP) launched last August.

“BUCG offered the best deal which would cost less than RM8 billion. The terms were improved after we accepted their proposal and they agreed at a lesser cost, although they asked for 150 acres of land.

“We said no to that.

“The other bidders asked for 400 acres but we didn’t agree to that either,” Lim said.

The three projects comprise a 4.2km bypass from Gurney Drive and Lebuhraya Tun Dr Lim Chong Eu, a 4.6km bypass between Lebuhraya Tun Dr Lim Chong Eu and Bandar Baru Air Itam, a 12km paired-road from Jalan Tanjung Bungah to Teluk Bahang, and the 6.5km Penang-Butterworth sea tunnel.

Having elicited criticisms from environmental groups and concerned Penangites, Lim conceded that the projects would be re-evaluated if the environmental impact assessment (EIA) underscored negative effects.

- The Malay Mail

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