Lim Hock Seng, who was previously in charge of public works, public utilities and transportation, said the payment, in the form of a land swap, was approved by the Penang executive council.
“There was nothing sinister. Consortium Zenith-BUCG Sdn Bhd (CZBUCG) filed their claims for the project to Upen (State Economic Planning Unit), and Upen referred the matter to our consultant HSSI (HSS Integrated Sdn Bhd).
“After HSSI approved it, Upen prepared a working paper for the exco’s consideration,” he said, when cross-examined by lawyer Gobind Singh Deo.
Gobind had asked Hock Seng about the Penang government’s decision to transfer land ownership to Consortium Zenith-BUCG’s (CZBUCG) subsidiary companies Ewein Zenith Sdn Bhd and Zenith Urban Development Sdn Bhd.
The state government paid more than RM208.7 million for the feasibility study and detailed design for the three main roads’ project.
The prosecution is contending that Guan Eng had misappropriated two plots of state land, amounting to RM208.7 million, for the two companies. He was slapped with two charges under Section 403 of the Penal Code over the alleged misappropriation.
He is also accused of using his position as then Penang chief minister to ask CZBUCG director Zarul Ahmad Mohd Zulkifli for a 10% cut of the profits which would be made from the roads and tunnel project.
The former finance minister is also accused of seeking RM3.3 million in kickbacks to appoint Zarul’s company to undertake the project.
Gobind then asked the witness what criteria the contractor needed to fulfil before being entitled to the land payment.
“They need to achieve certain ‘milestones’ before we can transfer the land to them. This includes the feasibility studies,” Hock Seng said.
The overall RM6.3 billion project, comprising an undersea tunnel and three roads, was mooted by the state government to improve the traffic system on the island.
The undersea tunnel, spanning 7.2km, was to connect Pangkor Road in Pulau Tikus on the island with Bagan Ajam in Butterworth and had been scheduled to start in 2023.
The “three roads” component were 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).
Hock Seng also told the court that a sum of RM5 million was charged as land premium against Ewein Zenith to transfer the land title from “leasehold” to “freehold”.
“They asked for the change in land status. I don’t know how the RM5 million was calculated. It was probably done by the valuation and property services department,” he added.
The hearing continues before Judge Azura Alwi tomorrow. Former Upen officer Muhamad Azrai Mohamad Zaini is scheduled to take the witness stand.