Quoting industry sources, he said main contractor China Railway Construction Corporation (CRCC) apparently “could not continue” with the project as it had only received 5% of the payment.
“I was told that CRCC could not continue with the project as it has only received 5% (or a little over RM3 million) in payment from their RM69 million contract ever since the tunnel project was awarded five years ago.
“How do you expect CRCC to continue work if they allegedly did not receive agreed payments?” Wee asked in a statement today.
FMT has contacted Construction Zenith Sdn Bhd for comment and is awaiting its reply.
The payment in question is for the feasibility study and detailed design (FSDD) for the project, worth RM305 million.
CRCC is one of 34 consultants in the study and was awarded a US$22 million (RM69.3 million at 2013 exchange rate of RM3.15 per dollar) contract.
In the breakdown of costs, revealed in the state Public Accounts Committee (PAC) report, the total cost of the FSDD for the three major roads was RM208.754 million, which involved 19 consultants.
The FSDD for the undersea tunnel was RM96.248 million, which involved 15 consultants, including CRCC.
Wee said this development was worrying as the master contractor of a RM6.3 billion project had received only a small sum over a period of five years.
He said this would likely reflect badly on the financial strength of the consortium or special purpose vehicle that won the project.
“Is this also why BUCG (Beijing Urban Construction Group) was quietly withdrawn from the project and had only 0.0057% shareholdings prior to the chief minister putting up a public show to allegedly ‘kick them out’ from Penang?
“Is this also the reason why Malaysian public-listed Mudajaya Group Bhd (Mudajaya) withdrew from the project despite being officially awarded a RM810 million contract to construct one of the three roads?
“In its (Mudajaya’s) official submission to Bursa Malaysia in November 2017, it had cited various uncertainties in the project as the main reason for its withdrawal,” Wee said.
The 7.2km undersea tunnel will connect George Town’s Pangkor Road and Bagan Ajam in Butterworth. If the feasibility results are positive, the project is scheduled to begin in 2023.
The “three main roads” (formerly three paired roads) stretch 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 contract was awarded via an open tender in 2013 to Consortium Zenith-BUCG Sdn Bhd (CZBUCG).
Initially, Consortium Zenith-BUCG comprised BUCG, which held 10% share and RM541 million in paid-up capital, and two other shareholders, Sri Tinggi Sdn Bhd (10%) and Juteras Sdn Bhd (10%).
BUCG (M) Sdn Bhd had applied to have itself removed as one of three partners in the larger CZBUCG in September 2016 following a fatal crane incident in Kuala Lumpur in August the same year.
Lim had reportedly said at the time that the Penang government “did not want an irresponsible contractor to be part of the undersea tunnel project. So we will allow BUCG to opt out from the consortium”.
Currently, the consortium is called “Consortium Zenith Construction Sdn Bhd” with Zenith Construction Sdn Bhd, Juteras Sdn Bhd, Kenanga Nominees (Tempatan) Sdn Bhd and Vertice Berhad as shareholders.
Guan Eng questions Najib’s ‘tunnel a waste of money’ comment