Tunnel ruckus - Penang gov't has failed, says Wee

BN minister Wee Ka Siong today claimed that the Penang government had failed to deliver on the promises it made over the RM6.3 billion undersea tunnel mega-project.

Wee said in that March 2013, the Penang government had promised that the special purpose vehicle (SPV) company - Consortium Zenith - which had been awarded the project had strong financial backing plus extensive experience in construction.

“However, now five years later, the feasibility study of the project has yet to be completed and construction for any of the project's components has been delayed by at least four years,” alleged Wee in a statement.

Penang Chief Minister Lim Guan Eng had previously said there was no rush to finish the study as the tunnel would only begin construction in 2023 and that the state government had yet to pay a single sen to the contractors.

Wee further contradicted this saying money had already been transacted.

"The SPV company has already booked profits from RM15 billion in property development projects on state land.

"These are part of the payments paid or to be paid by the Penang government for the tunnel project," claimed Wee.

Wee said a fashion company - Voir Holdings Bhd (now known as Vertice Bhd) - was listed as a shareholder of the SPV, with 39 percent of its shares held by unnamed nominees.

He asked if the new shareholders had the same financial strength and technical ability as the previous firms which were part of the SPV.

"The crux of the matter is whether the Penang government has done a 'bait and switch' move?" Wee asked.

"Simply put, what was promised was not what was delivered.

"Did the Penang government lie to the people with private developers benefitting to the tune of billions of ringgit using the Penang state land at the expense of the people?" he added.

Wee was responding to Seberang Perai Municipal councillor Joshua Woo Sze Zeng, who explained yesterday that the apparel's firm involvement in the project was due to its business diversification strategy.

Woo said it was very common for businesses to diversify and venture into new industries following the business conglomerate model.

Woo had drawn parallels with Sime Darby and Samsung,which he pointed out had also diversified into other businesses.

Woo further said Wee had no problems with Sime Darby but found fault with Voir 'just because it was a project spearheaded by the Penang government'

"Either that or he is merely ignorant of the conglomerate business model, which the federal government also adopts," Woo added.

Wee in his statement today said the fashion company has reported losses in each of the past three financial quarters.

Their last financial statement to Bursa Malaysia was on Nov 29 last year and showed that the company had cash balances of RM1.7 million and short-term loans of RM16.5 million, Wee said.

"I believe the Penang government is completely missing the point," Wee said.

Meanwhile, at a press conference today, Lim said the state had obtained a commitment from the SPV's main contractor - China Railway Construction Company – to ensure the project was completed.

As far as Voir was concerned, Lim dismissed it as Zenith's private business saying '… we do not interfere in the firm's private affairs'.

He accused Wee of 'creating confusion' and 'trying to undermine' the project by casting aspersions on the good reputation of the Penang government.

It is learnt that Zenith's CEO, Zarul Ahmad Mohd Zulkifli, also heads Voir, had said that the latter was looking to diversify its business by purchasing a stake in Zenith.

The tunnel is subject of a ongoing probe by the Malaysian Anti-Corruption Commission which has remanded for 10 days two high-ranking officials of two private companies linked to the project.

The commission had last week raided 12 agencies on the island and seized documents.- Mkini