Aside from the withdrawal of a project partner a few months ago, Consortium Zenith BUCG Sdn Bhd (CZBUCG) is now facing financial issues.
CZBUCG chairman Zarul Ahmad Mohd Zulkifli told the business daily this is due to the absence of revenue and being “paid” in land for the work that they have done so far.
“There is most certainly an impact on our financials. It would be different if we were paid cash because we are given land, which we have to convert into cash.
“Under the current market situation, it is not easy… it is very challenging,” Zarul was quoted as saying by The Edge.
“Even material costs could go up but as far as the state government is concerned, we will try as much as possible not to request for additional claims unless we genuinely cannot make money.”
Since the project commenced, including the preliminary impact assessment studies, the Penang government has transferred 1.5ha of land to CZBUCG for the milestones it completed. The value in terms of the land asset comes to about RM135 million.
According to The Edge, Zarul admitted that the project seems to be stalled but attributed it to reasons beyond the company’s control.
In September, project partner Beijing Urban Construction Group Co Ltd (BUCG) pulled out of the project owing to an accident that was not related to the Penang project.
It was previously reported that the China state-owned group left the project following a fatal crane incident involving its company in Jalan Raja Chulan, Kuala Lumpur on Aug 25.
The move raised doubts as to the ability of the JV to continue with the project, which includes three expressways and an undersea tunnel linking Penang island to the mainland.
Penang’s integrated infrastructure project comprises a 4.2km bypass from Gurney Drive to Lebuhraya Tun Dr Lim Chong Eu, a 4.6km bypass between Lebuhraya Tun Dr Lim Chong Eu and Bandar Baru Air Itam, a 12km paired-road from Jalan Tanjung Bungah to Teluk Bahang, and the 6.5km Penang-Butterworth sea tunnel.
It was intially set to begin construction in March next year but there is a six month delay due to the Department of Environment requesting for a Detailed Environmental Impact Assessment (DEIA).
“The DEIA must include input from forums conducted along the 12km alignment, and the first discussion with residents was carried out a month ago,” Zarul said, according to The Edge.
He was hopeful, however, that Phase 2 will take off in the second half of next year once land acquisitions are done with, and with the appointment of contractors to carry out the job.
“The project will go on as the agreement is binding. Since the day we were awarded the project, we have not had a smooth time. This project has been going on for more than two years.
“When we signed the agreement, we looked at all possibilities and made a conscious decision to go ahead with the project. We won’t turn back despite a lot of people sabotaging us,” Zarul told The Edge.