A coward is better than a political lunatic

My wife, Betty Chew, a lawyer, wondered aloud how MCA deputy president Wee Ka Siong can spin an RM6.3 billion public infrastructure project consisting of three highways and an undersea tunnel (the project) to suddenly cost RM20 billion.

As a lawyer, she stated that once you sign an agreement for the contracted price of RM6.3 billion, there is no way you can legally compel the state government to instead pay RM20.54 billion.

This is simple logic for anyone but Wee Ka Siong. Wee is lying again but this time he is making an RM20.54 billion lie to hide his cowardly failure to name which Penang state government leader had corruptly accepted millions of ringgit for this project.

His refusal contrasts with Pakatan Harapan leaders boldly naming the corrupt leader behind the 1MDB financial scandal that has turned Malaysia into a global kleptocracy. If Harapan dares to do so, why is Wee scared to do so? Or is Wee afraid of being sued because he knows he is lying and has no proof?

Wee lies like breathing air. He continues to recycle his lie that this project was improperly granted without fulfilling the minimum paid-up capital requirement of RM381 million. Wee did not mention names, but Wee is clearly making a baseless and unfair attack on the integrity of the Penang state secretary Farizan Darus, who heads the Penang Tender Committee that awarded the open tender to Zenith Consortium.

Even the MACC, which has unjustly hounded the Penang state government over this non-existent scandal, does not question the fact that the minimum capital requirement of RM381 million was fulfilled by Zenith Consortium. Wee has failed to show proof that the RM381 million minimum paid-up capital requirement was not met, just as he failed to show proof which state government leader accepted corruption money.

I know that Wee is under pressure from Umno forcing MCA to surrender the Bandar Tun Razak parliamentary seat and unable to force Alor Gajah BN to accept the prime minister’s chosen candidate and political secretary Wong Nai Chee to replace the incumbent Koh Nai Kwong.

MCA is also unable to get back the Kuantan parliamentary seat promised by Umno when MCA 'loaned' it to Umno in the 2013 general election. Wee is also humiliated that I have refused to debate him because he is not No 1 in MCA but only No 2.

However, this Umno pressure and personal humiliation should not have pushed Wee over the edge to say that the tunnel project costs RM20.54 billion. Wee again ignores the fact that this project was conducted by open tender at a price of RM6.3 billion.

Insulating against rising construction costs

Wee claims that the tunnel is not needed because there is still 50 percent available capacity for the second Penang bridge. This 50 percent available capacity is for now. In 10 years time, the available capacity will be zero and filled instead with traffic congestion. The recent accidents on the Penang first bridge causing severe jams is a reminder how vital a third link, or tunnel, is sorely needed. That is the reason the state government is planning ahead to build the tunnel by 2027.

To insulate against rising building and construction costs in 10 years, the state government has locked in the costs at present prices. As the state government has no cash, we have no choice but to finance the project through a land swap. The state government also seeks to maximise our land value, by not assessing it at the current value when the agreement was signed in 2013. Instead, it is to be assessed at a possible future value of RM1,300 per sq feet in 2023, when the construction of the tunnel commences.

Land swap and no traffic guarantees toll concession

Wee admits that the future land value of RM1,300 per sq feet for the land is high. In fact, it is three times the estimated land value in 2013 of RM475 per sq feet. At the same time, Zenith has to source financing and pay the substantial interest cost.

That is why the toll concession is only for the tunnel (the other three highways are toll-free) and was made available to provide some opportunity for profit, or else no one would enter a bid for the contract.

However, the state government refuses to provide a traffic volume guarantee in the toll concession to Zenith. No monetary compensation is needed to be paid to Zenith if traffic volume is low and does not meet its break-even operating costs. Traffic volume guarantees are a common feature in BN concession agreements to maximise profits for their cronies.

In other words, all risks are borne by Zenith, namely:

• Paying the interest cost of sourcing loan financing;
   
• No traffic volume or profit guarantees,
   
• Zenith bears the risks of rising construction costs and any drop in land values; and
   
• Even if there is any rise in land values by 2023, Zenith is unable to enjoy the benefits of any rise in land values when it is computed at a high 2023 future value.

It is dishonest of Wee to talk about Zenith benefiting from rising land values but not talk about Zenith having to pay for rising construction costs in 10 years' time. It is also dishonest for Wee to add in other road works, merely to make up the numbers for his fictitious RM20.54 billion, when these other roads, such as the Pan Island Link, have no bearing nor connection to this project. It does not make sense. There is no RM20.54 billion cost to Penang. The state government only signed for RM6.3 billion!

There is an old Greek saying that “Those whom the gods wish to destroy, they first make mad.”

Wee, better to remain a coward.

A coward is a better fate than being a political lunatic.

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LIM GUAN ENG is the Penang chief minister and DAP secretary-general. -Mkini