MP SPEAKS | Penang Deputy Chief Minister II P Ramasamy's opinion piece today to defend the Penang tunnel scandal is a joke and is nothing more than a drowning man clutching at straws. 

He claims that there is a campaign against the Penang government using half-truths, outright lies and distortion of facts against the Penang tunnel project and yet he has been caught red-handed using half-truths, outright lies and distortion of facts to mislead and confuse the people.

Firstly, he says "I don't think the Penang state secretary said that the CRCC (China Railway Construction Corporation Ltd ) holds equity in the SPV."

"I don't think..."

This is a ridiculous statement coming from a deputy chief minister (DCM), saying "he doesn't think" when it is his responsibility in his DCM position to know the fact.

The state secretary did indeed say that in his statement dated March 4, 2013, to defend allegations that the special purpose vehicle (SPV) does not meet the financial requirement to have a combined paid-up capital of at least RM381 million.

"Zenith Construction Sdn Bhd bersama China Railway Construction Corporation Ltd sebanyak 70 peratus ekuiti dengan modal berbayar sebanyak RM3.5 juta dan RM4 bilion masing-masing; Beijing Urban Construction Group 10 peratus ekuiti dengan modal berbayar sebanyak RM541 juta," said the state secretary then when he claimed the SPV is backed by RM4.5492 billion in paid-up capital.

Does the word "ekuiti" (equity) mean anything to Ramasamy?

Penang Chief Minister Lim Guan Eng (photo) also repeated that RM4.5 billion paid-up capital backing in his interview with KiniBiz published on 11 April 2013.

"The project was not awarded to some RM2 crony company with no expertise or experience at an overly-inflated price but to companies with a combined paid-up capital of RM4.5 billion," said the CM then.

Today, both the Beijing Urban Construction Group and CRCC are not shareholders in the SPV with CRCC confirming that they are just a contractor to the SPV and not a shareholder.

In their place as a shareholder is now a loss-making local fashion company in addition to almost 40 percent of the shares now held under nominee on behalf of unnamed nominees.

Would Ramasamy agree that a "bait-and-switch" has now taken place where what was promised is now something entirely different?

I stress that CRCC is a contractor to the SPV and did not enter into a construction contract with the Penang government.

'Prove me wrong'

Ramasamy can prove me wrong by publishing the contract between the Penang government directly with CRCC. But he will not succeed as such a contract does not exist.

Last week, CRCC confirmed that it was never a shareholder or a developer of the SPV and is just a contractor but the project has not started. This raises a serious question as to whether the SPV has the financial strength to pay CRCC.

The effect of this means that the RM6.34 billion project has now been awarded to a local company with only RM300,000 paid up capital that was only registered on Aug 22, 2011 - less than three months before the tender opened.

With this revelation, Ramasamy should explain why the Penang government does not penalise or cancel the contract as the SPV has never met the minimum RM381 million paid-up capital backing required for the project.

Ramasamy also goes on to say that how Consortium Zenith made a pre-tax profit of RM60 million for the financial year that ended in August 2015 is of no concern to the state government as they may have "other business".

He has essentially skipped the issue that Consortium Zenith is the SPV only registered in July 2012 for the sole purpose of delivering the Penang tunnel project.

Their only source of revenue at that point in time in 2015 would be from doing the RM305 million reports or selling or developing the state land given as payment for doing the reports.

Thus, questions that the RM305 million reports are grossly over-priced are valid given the super profits that the then two-year-old SPV was already raking in.

While the SPV is making a huge amount of money, the people of Penang do not benefit. The RM305 million reports are still not completed and no construction has ever started even after almost five years of being awarded the project.

Ramasamy should answer why the company does not seem to have been penalised at all for continuously missing the agreed timelines as per the agreement while they continue to rake in big profits arising from doing the reports and/or exploiting the land given as payment.

Of course, Ramasamy has also avoided other worrying questions.

The SPV had entered into a joint venture (JV) with a listed company to pre-sell 50 acres of state land rights at a price of RM2.83 billion to develop a RM15 billion GDV property project.

Ramasamy should comment on why the chief minister was present at both the launch of the RM15 billion project in August 2015 as well as the signing ceremony of the memorandum of agreement to sell the land for RM2.83 billion in Jan 2016.

Ramasamy should also answer why the cost to produce reports for a simple 10km paired road with a construction cost of RM377 million is a staggering RM120 million while the cost of reports for the much more complicated tunnel costing RM3.6 billion to construct is only RM96 million.

Would Ramasamy agree that there is ridiculous front-loading of reports costs resulting in the SPV being paid the bulk (RM209 million) of the total reports cost of RM305 million much earlier?

Ramasamy should stay out of defending this increasingly serious Penang tunnel scandal if he does not know what he is talking about by only resorting to "I don't think" excuses and putting himself at risk of getting dragged down with the scandal.

WEE KA SIONG is MCA deputy president and MP for Ayer Hitam.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.