The Penang government has denied state BN allegations that a RM2 company - Konsortium Zenith BUCG Sdn Bhd (BUCG) - has been awarded the tender to construct a controversial RM6.3 billion road project.

NONE "It is not true at all, as the company’s paid-up capital is RM4,549.2 million (RM4.5 billion)," said state secretary Farizan Darus (left) , in a statement distrubuted during Chief Minister Lim Guan Eng’s press conference today.

The statement was jointly signed by state technical and financial committee chairperson Mokhtar Mohd Jait.

"As state officials for the board of procurement, technical committee and financial department, we regret that the award of the tender which was conducted via an open tender system, has been questioned by certain quarters," Farizan said.

“The technical evaluation process and the selection of tender was done in a professional manner by a committee that was chaired by me did not involve Lim.

“The state executive councillors merely endorsed the recommendation to award the tender to the company when it was presented to them on Jan 30.”

Farizan was responding to allegations by state BN information chief H'ng Khoon Leng that Lim’s announcement of the project had caught the people by surprise as it was awarded to a company with a paid up capital of RM2 and authorised capital of RM100,000.

NONE At the same BN briefing, state Umno Youth chief Shaik Hussein Mydin (left) urged Lim to explain the tender process for developers of such projects, adding that they should have strong financial resources and not merely supporting letters and registered company names.             

The decision to proceed with the project has been strongly opposed by NGOs.

The mega-project consists of four packages that have been awarded to the Malaysia-China joint-venture company.         

The packages include a 6.5km Gurney Drive-Bagan Ajam undersea tunnel, the 4.2km Gurney Drive-Lebuhraya Tun Dr Lim Chong Eu bypass, the 4.6km Lebuhraya Tun Dr Lim Chong Eu-Bandar Baru Air Itam bypass, and a 12km road connecting Tanjung Bungah and Teluk Bahang.

'Lowest bid received '

             

Farizan said the cost of the project was initially RM8 billion, but after the competitive tender process which began in Nov 14, 2011, a letter of intent was issued to the developer on Feb 6 this year for works costing RM6.3 billion.

He said the amount was the lowest among all the bidders and described this as a "unique" project.

"It will not be paid by cash but a land swap of 110 acres on reclaimed land in Tanjung Pinang. For this, we need a contractor with expertise to work with the developer," added Farizan, who is also the state financial officer.

Farizan said BUCG can only be deemed a RM2 company in that it was set up as a special purpose vehicle for the joint-venture with:

- Zenith Construction Sdn Bhd and China Railway Construction Corporation Ltd with a 70 percent equity and a paid-up capital of RM 3.5 million and RM 4 billion respectively;

- Beijing Urban Construction Group with 10 percent equity and paid-up capital of RM 541 juta;

- Sri Tinggi Sdn Bhd with 10 percent equity and paid-up capital of RM3,7 million; and

 

- Juteras Sdn Bhd with 10 percent equity and paid-up capital of  RM 1 million.

Farizan said BUCG’s total paid-up capital of RM4,549.2 million fulfils the state government’s criteria, which put the minimum at RM381 million.

“If the company was not successful in the tender, it was to be dissolved. If it succeeded, each partner or shareholder must sign a letter of acceptance directly with the state government.

“The letter of intent which we issued was signed by all companies to show that they would all work on the project with the state government, not only (BUCG). This was done to ensure that a prestigious company will carry out the project.”

Farizan said China Railway Construction Corporation Ltd and Beijing Urban Construction Group are giant powerhouses in China, and have the required experience as they were involved in the construction of big railways, tunnels and the ‘Bird Nest’ stadium in Beijing.