GEORGE TOWN: The Penang government today denied claims it had allowed a company to “pre-sell” RM3 billion worth of land given to them as payment for an environmental study.
Chief Minister Lim Guan Eng said his government has not paid “a single sen” to the company which won a tender to build an undersea tunnel and three roads in 2013.
He was referring to The Star’s report today claiming that the state government had allowed a “special purpose vehicle” company to “pre-sell state land rights worth RM3 billion despite a four-year delay in the construction of roads”.
Lim said the state government had only given two pieces of land to Consortium Zenith — the construction company in charge of the project — as payment for an environmental study for the three major roads’ component, minus the undersea tunnel.
“We only paid RM208 million in kind (to the consortium). We do not have money, so we paid through a land swap.
“That payment was for the environmental impact assessment (EIA) for the three roads. Not the tunnel.
“We gave the consortium two pieces of land measuring 3.7 acres with a net development value at RM1,300 per square feet. Otherwise, we have not paid a single sen to them.
“So, what is The Star talking about? Where did they get the RM3 billion ‘pre-sell land’ for the tunnel?
“I regret the BN media has published lies to benefit BN in the run-up to the general election,” Lim said at a press conference in Komtar today.
The “three main roads” (formerly three paired roads) project are from Air Itam to the Tun Dr Lim Chong Eu Expressway (5.7km); Tanjung Bungah to Teluk Bahang (10.53km); and Jalan Pangkor-Gurney Drive junction to Tun Dr Lim Chong Eu Expressway (4.1km).
The 7.2km undersea tunnel will connect George Town’s Pangkor Road and Bagan Ajam in Butterworth. It is scheduled to begin in 2023.
Its feasibility study, often a topic of contention between BN and opposition leaders, is now at 92%.
The cost of the two projects is RM6.3 billion.
Lim said the payment of RM208 million to the project’s contractors was based on a review by HSS Integrated Sdn Bhd (HSSI), a specialist engineering firm which is also involved in the East Coast Rail Link (ECRL) project.
He said HSSI was the company that oversaw the tender process together with the State Tenders’ Committee, chaired by the state secretary.
Lim said no state Exco members were on the committee and the final evaluation of the project was done by the state finance officer and HSSI.
Guan Eng’s tutorial to reporters on how RM208 million was determined
Later, Lim gave a chronology of how the consortium won the tender for the project.
2013 — Consortium Zenith wins the project to build the undersea tunnel and three main roads through an open tender. The evaluation was made by the State Tenders’ Committee, chaired by the then state secretary. Lim says none of his state executive council members were part of this process.
2014 — The awarding of the tender to Zenith was overseen by HSSI. Zenith had then claimed RM302 million as payment for the EIA for three major roads. HSSI was then asked to see if the amount was reasonable. They had then returned to the Penang government and said the amount should be RM208 million.
Lim said in order to pay RM208 million, which the Penang government did not have, they gave two pieces of land measuring 3.7 acres with a net development value of RM1,300 per square feet. He said the prices did not reflect the land prices then, but priced it according to a value that it might appreciate in the future.
Meanwhile, Lim said the feasibility studies for the undersea tunnel was the least of his concerns as the three major roads were a priority.
“There is no rush. We do not have the urgency for the tunnel. So, the roads first. In contractual terms, we cannot force them to finish at a certain time.
On the two arrested executives from the project, Lim said they were in no way related to the Penang government.
“We feel this is an evil scheme, a political witch-hunt to fix up the Penang government. We will let MACC (Malaysian Anti-Corruption Commission) decide.
“We have instructed state government officers to cooperate fully with MACC.
“We are confident there are no irregularities and no corruption in this infrastructure project.” -FMT
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