GEORGE TOWN: China Railway Construction Corporation (CRCC) has confirmed that it was never a shareholder in the special purpose vehicle (SPV) for the proposed RM6.3 billion Penang undersea tunnel project.
The company also said it was not a shareholder in SPV's parent company, Zenith Construction Sdn Bhd, nor did it ever dealt directly with the Penang government for the project, which included an undersea tunnel and three-paired roads.
This was conveyed to Transport Minister Datuk Seri Liow Tiong Lai by top officials of CRCC during his recent visit to China to attend the 1st Asia Pacific Ministerial Conference on Civil Aviation and a bilateral meeting with his Chinese counterpart in Beijing.
Liow said the top CRCC officials were eager to stress certain points to him as they had been informed and briefed on the recent controversy regarding the Penang tunnel and three paired roads project.
"CRCC has neither given approval nor has knowledge of why the Penang government had considered them as shareholders of the project’s SPV.
"The company said they had only signed an 'acknowledgment of commitment' as an appendix to preliminary agreement of the project, that they will deliver the project should they be awarded any portion of the project by the SPV," he added.
Liow said as of today, CRCC had preliminarily contracted with the SPV to be the EPC (engineering, procurement & contruction) contractor, and had also been given a contract by the SPV to perform detailed design reports for a total of US$22 million for the three roads and undersea tunnel.
"CRCC also assures that the unique circumstances of the Penang tunnel and three paired roads project cannot and shall not be used as a measure of their performance, and that CRCC will deliver its commitments for any current or future contracted projects as per agreed schedules and budget," he noted.
Previously, MCA deputy president Datuk Seri Dr Dr Wee Ka Siong had asked if the Penang government could produce proof to support its earlier statement that CRCC was a shareholder in the SPV.
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, 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.
Chief Minister Lim Guan Eng uploaded a video on his Facebook page recently to answer questions on investors raised by Wee.
In the video, he said the composition of shareholders would not affect the project as they were not the main contractor, while stressing that CRCC was still the main contractor.
The Penang Barisan Nasional had also asked the state government to come clean on the discrepancy in the cost of feasibility studies and detailed design (FSDD) works for the tunnel project.
CRCC had announced previously that it signed the FSDD contract valued at USD22 million (or approximately RM69.3 million) for the tunnel project in Penang.
However, the Penang Public Accounts Committee (PAC) of the state assembly dated Oct 19, 2015 and the state government’s reply to the state assembly on May 19, last year, put the total value of the FSDD at RM305 million, a difference of RM236 million.
Hitting back at claims of discrepancy, state Local Government, Traffic Management and Flood Mitigation Committee chairman Chow Kon Yeow had explained that CRCC was not the only consultant involved with the FSDD works for the project.
He had said that CRCC was one of 34 consultants appointed by Consortium Zenith Construction Sdn Bhd to conduct the studies, which brings a total of RM305 million for the studies of both the undersea tunnel and three paired roads projects.
He explained that CRCC was only conducting part of Package 4, which is the undersea tunnel project, and therefore the value of RM69.3 million wa
s part of the FSDD works for the project.
The Penang undersea tunnel project had raised numerous controversies in recent months, especially on the high cost of the RM305 million technical studies as well as the 21-month delay in completing it.
It is now a subject of investigation by the Malaysian Anti-Corruption Commission (MACC).
To date, four people, including a Datuk Seri, two Datuk and a female engineering consultant, had been detained to assist in investigation. All have since been released.