By Liang Teck Meng
Last week, the Penang government confirmed that it will pay RM305 million to Consortium Zenith-BUCG Sdn Bhd (CZBUCG) to do three studies related to the Penang Tunnel project.
The state government also confirmed that part-payment of RM135 million was already paid by alienating land of equivalent value to the consortium.
After much questioning and scrutiny, the Penang government continues to maintain that the price of RM305 million for the three studies was a “reasonable” cost and “within limits”.
However, checks with the filings of CZBUCG with the Suruhanjaya Syarikat Malaysia (SSM) have revealed surprising information.
As we know, CZBUCG has not yet started construction. Further, as far as available information shows, this special-purpose company’s only business activity to date has been the three studies.
The latest filing by the CZBUCG shows that the company had lodged their audited accounts for their financial year ended Aug 31, 2015.
The accounts reflect that they have recorded sales revenues of RM51.8 million and an after tax profit of RM54 million on a paid-up share capital of only RM8 million.
This high profitability so early in their project is very unusual for a typical concession company where losses in the early stages are the norm.
Can the Penang government explain if CZBUCG’s high profitability is due to profits made from the work done on the three studies?
Or is this high profit due to capital gains profits from land sales that was given as part payment by the state government – the state claims the land value is only RM475 psf whereas evidence has shown that the market value is much higher – leading to windfall capital gains for the company?
Also interesting to note is that the filings also show that despite the Penang government’s continued efforts to position this as a joint-venture between China and Malaysia, the China-based company, BUCG, only owns 0.0057% of CZBUCG.
The rest is owned by local interests. Can the Penang government confirm this?
Liang Teck Meng is Gerakan Secretary-General and Member of Parliament for Simpang Renggam
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