GEORGE TOWN: The expose by Transport Minister Datuk Seri Liow Tiong Lai about China Railway Construction Corporation (CRCC)'s role in the proposed RM6.3 billion Penang undersea tunnel project must come as a big blow to Chief Minister Lim Guan Eng.
Barisan Nasional Strategic Communications (BNSC) deputy director Eric See-To said this was because Lim had repeatedly used CRCC’s name in recent weeks to deflect criticism from MCA deputy president Wee Ka Siong.
Wee had previously asked if the Penang government could produce proof to support its earlier statement that CRCC was a shareholder in the special purpose vehicle (SPV) for the tunnel project.
The state government had stated in the March 4, 2013 issue of its fortnightly publication Buletin Mutiara that CRCC and Zenith Construction jointly owned 70 per cent of the project.
The other shareholders were Beijing Urban Construction Group (BUCG), Juteras Sdn Bhd and Sri Tinggi Sdn Bhd, holding an equal share of 10 per cent each. Together, these companies formed the SPV for the project.
See-To said CRCC had revealed to Liow that they were neither a shareholder of the SPV, and was clueless as to why the Penang government had used their name. On top of that, CRCC was also never contracted directly with the state government.
He added that CRCC had also revealed that their only contracted role so far was with the SPV and was a sub-contract for only US$22 million (RM66 million then) to do detailed design for the three paired roads and the tunnel despite the SPV charging RM305 million to the state government for this.
"So, if CRCC only got RM66 million as a sub-contract to do the bulk of work for the RM305 million studies that the Penang government had paid RM220 million for, then who got the rest of the money?" he asked today in his latest posting on Facebook.
See-To said Liow also hinted to the press, after a press conference today, that CRCC had only received five per cent payment (or about RM3 million) for that sub-contract, and thus did not continue with the work.
"Now that BUCG and CRCC have confirmed to not being a shareholder of the tunnel SPV company, the Penang government's argument that the SPV was backed by RM4.5 billion of paid-up capital, is dead in the water.
"As a result, a news portal has now reported that the state government had 'mistakenly' named CRCC as a shareholder – a mistake that was made in an official press statement by the Penang State Secretary and repeated at least six times more at different occasions by Lim to various media at that time – as revealed in a video posted by Wee last week.
"The consequence of this 'mistake' is that the state government had essentially awarded a RM6.34 billion project to a then 'financially distressed' company that was only 82 days old and had paid-up capital of only RM300,000," he said, adding that the RM300,000 was hardly enough to meet the RM 381 million minimum paid-up capital to even qualify for the request for proposal (RFP).
See-To questioned then is that competent, accountable and transparent.
"Is it any wonder that the graft busters had launched investigation into the tunnel project for abuse of power and corruption and that four senior executives have already been arrested and remanded?" he further questioned.
The Penang undersea tunnel project had raised numerous controversies in recent months and it is now a subject of investigation by the Malaysian Anti-Corruption Commission (MACC).