Did the Penang Govt do a "bait and switch" on the Penang people?
That was the question posed by MCA deputy president Datuk Seri Dr Wee Ka Siong after it was revealed that a local fashion company has been identified as the shareholder of a special purpose vehicle (SPV) for the RM6.3bil Penang undersea tunnel project.
He questioned how the DAP-led Penang state government can claim that it is normal for a loss-making local fashion company to be suddenly involved in building a complicated multi-billion undersea tunnel as its first project as part of normal buisness diversification process.
Shareholdings disclosure of the company on Bursa Malaysia. Pic: mca.org.my
Shareholdings disclosure of the company on Bursa Malaysia. Pic: mca.org.myShareholdings disclosure of the company on Bursa Malaysia. Pic: mca.org.my
"Taking aside the fact that the fashion company has reported losses in each of the past 3 financial quarters and their last financial statement submitted to Bursa Malaysia on 29 Nov 2017 showed that the company had cash balances of RM1,7 million and short-term loans of RM16.5 million, I believe the Penang Government is completely missing the point.
"The main point is that the Penang Govt had reassured and promised to the people of Penang in March 2013 when the project was awarded that the Special Purpose Vehicle (SPV) company had strong financial backing of RM4.6 billion and had deep experience in construction," Wee highlighted, in a statement posted on MCA's website.
He points out that five years later there was nothing to show except for the millions spent on uncompleted feasibility studies.
“Did the DAP government lie to the public and made a bait and switch?" he asked.
Meanwhile, political analyst Datuk Eric See-Toh has revealed that the project never awarded on open tender.
"This is an interesting development as the project was never awarded based on Open Tender as DAP frequently claims.
"It was done via a Request for Proposal (RFP) exercise where a company was then selected for further negotiations before agreement signing," he noted in a recent Facebook posting.
"The Penang Government should release the minutes of why the winner was selected and why others were rejected," he urged the DAP-led Penang government to give a proper explanation over how this could have happened.
This is important, he stressed as the result has clearly led to "such lop-sided terms that is in favour of the contractor and at the expense of the people of Penang" which is the reason for the Malaysian Anti-Corruption Commission (MACC) investigation now.
"Allowing many to participate in an open RFP is not the most important question but how and on what basis the final party was selected and the negotiations after that," he added.
"Taking aside the fact that the fashion company has reported losses in each of the past 3 financial quarters and their last financial statement submitted to Bursa Malaysia on 29 Nov 2017 showed that the company had cash balances of RM1,7 million and short-term loans of RM16.5 million, I believe the Penang Government is completely missing the point.
"The main point is that the Penang Govt had reassured and promised to the people of Penang in March 2013 when the project was awarded that the Special Purpose Vehicle (SPV) company had strong financial backing of RM4.6 billion and had deep experience in construction," Wee highlighted, in a statement posted on MCA's website.
He points out that five years later there was nothing to show except for the millions spent on uncompleted feasibility studies.
“Did the DAP government lie to the public and made a bait and switch?" he asked.
Meanwhile, political analyst Datuk Eric See-Toh has revealed that the project never awarded on open tender.
"This is an interesting development as the project was never awarded based on Open Tender as DAP frequently claims.
"It was done via a Request for Proposal (RFP) exercise where a company was then selected for further negotiations before agreement signing," he noted in a recent Facebook posting.
"The Penang Government should release the minutes of why the winner was selected and why others were rejected," he urged the DAP-led Penang government to give a proper explanation over how this could have happened.
This is important, he stressed as the result has clearly led to "such lop-sided terms that is in favour of the contractor and at the expense of the people of Penang" which is the reason for the Malaysian Anti-Corruption Commission (MACC) investigation now.
"Allowing many to participate in an open RFP is not the most important question but how and on what basis the final party was selected and the negotiations after that," he added.
"According
to a MACC source, the investigation was zeroing in on the tender
process and appointment of the company to carry out the feasibility
study for the (Penang Tunnel) project." said a report today.
This is an interesting development as the project was never awarded based on Open Tender as DAP frequently claims.
It was done via a Request for Proposal (RFP) exercise where a company
was then selected for further negotiations before agreement signing.
The Penang Government should release the minutes of why the winner was
selected and why others were rejected as well as the minutes of the
attendees and what was discussed during the negotiations with the winner
prior to the final agreement that led to such lop-sided terms that is
in favour of the contractor and at the expense of the people of Penang.
Allowing many to participate in an open RFP is not the most important
question but how and on what basis the final party was selected and the
negotiations after that.
“There were politicians who received a few hundred thousand ringgit and those who took millions.
“Investigators are digging in on the extent of the misconduct and where the payments took place.
“It is believed that this is also related to the two land swaps
done as payment for the feasibility study,” said a source, who declined
to elaborate.
In troubled waters: An artist’s impression showing where the tunnel project will start on the island.
Land swap under MACC scrutiny
PETALING JAYA: The Malaysian-Anti Corruption Commission (MACC) probe into the controversial Penang undersea tunnel is focused on land swaps that were made for the feasibility and detailed design study which has yet to be completed.
Sources said investigators are scouring documents involving two plots of land – Lot 702 and Lot 713 in Bandar Tanjung Pinang – with a size of 1.48ha and 2.31ha respectively.
The value of Lot 702 is around RM135mil while Lot 713 is around RM160mil.
It is learnt that both parcels of land have since been mortgaged to banks to obtain financing. The state government has also authorised planning permission on both parcels of lands.
“The state government paid the consultant for the feasibility studies by means of two land swaps. The cost for the feasibility study is around RM305mil.
“It has become an issue on why the study cost was inflated so much when it should have been an estimated RM60mil,” sources said, adding that determining the inflation and the reason behind it were among the challenges faced by the investigating team.
The sources also said that the graft-busters have their sights targeted on “somebody” who has been enjoying kickbacks and entertainment from the deal.
The feasibility and detailed design study is for the 7.2km undersea tunnel connecting Gurney Drive on the island to Bagan Ajam in Seberang Perai.
It is part of the RM6.3bil mega project comprising a 10.53km North Coastal Paired Road (NCPR) from Tanjung Bungah to Teluk Bahang, the 5.7km Air Itam–Tun Dr Lim Chong Eu Expressway bypass and the 4.075km Gurney Drive–Tun Dr Lim Chong Eu Expressway bypass.
Yesterday, the investigating team also questioned four officers from several state government agencies on the land swaps.
Sources added that the anti-graft agency also raided a property agency office in Penang and carted various documents away. It is learnt the chief executive officer of the company was not around during the raid.
MACC deputy chief commissioner Datuk Seri Azam Baki said his investigating team has yet to call in any witnesses for the case as they are still conducting a thorough study on the seized documents.
He added that the officers would still be obtaining more documents from the companies involved and also from the state government.
Two bosses of construction firms held for six days as MACC investigates project
Taken away: Officers escorting one of the men out of the courthouse in Putrajaya.
MACC digs deeper
A swap involving two parcels of land worth close to RM300mil is in the spotlight as the MACC intensifies investigations into claims of corruption in Penang’s undersea tunnel project and several accompanying highway projects. Two ‘Datuks’ have been remanded and several key officials in companies and agencies involved in the project have been questioned. But Chief Minister Lim Guan Eng says the project will go on.
GEORGE TOWN: Chief Minister Lim Guan Eng says the undersea tunnel project, now the subject of a corruption investigation, will proceed unless there is a court order to stop it.
He said he was baffled by yet another investigation into the project as the Malaysian Anti Corruption Commission (MACC) had been conducting an investigation into the RM6.3bil mega project comprising the tunnel and three other highways since 2016.
“What are they investigating now? Is it because of the looming general election?
“The project was awarded via an open tender overseen by international accounting firm KPMG.
“Still, I have instructed everyone involved to give their full cooperation to the MACC in its investigation as we have nothing to hide,” said Lim at a press conference at Komtar yesterday.
On Tuesday, graft-busters arrested two “Datuks” involved in the controversial Penang undersea tunnel project to help in investigations into claims of corruption.
The duo, who were picked up in Putrajaya and Penang, have since been remanded for six days to facilitate the probe.
The anti-graft agency raided the offices of four state government agencies – the Penang Public Works Department, Penang State Secretary, Penang Office of Lands and Mines and Penang Valuation and Property Services Department – and three property development and construction companies – Ewein Zenith Sdn Bhd, 555 Capital Sdn Bhd and Consortium Zenith Construction Sdn Bhd’s Penang office.
MACC officers also questioned several officers in charge of the respective agencies and companies. Sources familiar with the investigation said the probe into the undersea tunnel project was also zooming in on land swaps.
Ewein Zenith is a joint-venture vehicle of Ewein Land Sdn Bhd and Consortium Zenith BUCG Sdn Bhd.
The latter is a Malaysia-China joint venture that was awarded the RM6.3bil mega project to build the 7.2km undersea tunnel connecting Gurney Drive on the island to Bagan Ajam in Seberang Prai, a 10.53km North Coastal Paired Road (NCPR) from Tanjung Bungah to Teluk Bahang, the 5.7km Air Itam–Tun Dr Lim Chong Eu Expressway bypass and the 4.075km Gurney Drive–Tun Dr Lim Chong Eu Expressway bypass.
Consortium Zenith BUCG changed its name to Consortium Zenith Construction Sdn Bhd on Jan 18 last year after the withdrawal of Beijing Urban Construction Group (BUCG).
In a related development, Vertice Bhd (formerly known as Voir Holdings Bhd) said the current investigation by the MACC will not impact the progress of the undersea tunnel project.
It said the project was an integral component of the Penang Transport Master Plan and that the role of Consortium Zenith Construction as the main contractor would remain.
Consortium Zenith Construction is a 13.2% associate company of Vertice. PUTRAJAYA: Two high-ranking bosses of development and construction companies have been remanded for six days as graft investigators continue their probe of the Penang undersea tunnel project. The two “Datuks” were held here and in Penang before being brought to court.
A 59-year-old businessman was brought to a magistrate’s court here at 9.40am yesterday and remanded for six days until Monday to help with the Malaysian Anti-Corruption Commission’s (MACC) investigation.
Magistrate Fatina Amyra Abdul Jalil allowed MACC prosecutors’ remand application although the Datuk’s lawyer Hamidi Mohd Noh objected, arguing that there was no need for his client to be held.
“I told the court that my client has been cooperative with the MACC.
“I would also like to point out that my client is innocent and his remand is only to assist the investigation,” he told reporters after the proceedings.
The MACC had initially asked for the Datuk to be held for seven days but the magistrate only allowed six days.
He was arrested at the MACC headquarters at around 8.45pm on Tuesday after being called for his statement to be recorded.
In George Town, another Datuk was brought to court for a remand application at 11.40am.
He was handcuffed and wearing MACC’s orange lock-up T-shirt with black pants when he arrived at the courthouse escorted by MACC officers.
The 49-year-old appeared calm and smiled to reporters but did not say anything before he was led inside.
Deputy registrar Muhammad Azam Md Eusoff granted a six-day remand order and the businessman was escorted out of the courthouse about 30 minutes later.
The case is being investigated under Section 16(a)(B) of the MACC Act 2009 for bribery.
It is also believed that one of the Datuks remanded yesterday tested positive for drugs.
On Tuesday, MACC personnel raided the offices of four state government agencies – the Penang Public Works Department, Penang State Secretary, Penang Office of Lands and Mines and Penang Valuation and Property Services Department – and three property development and construction companies believed to be related to the case.
The project involves a plan to bore a 6.5km tunnel below the seabed to connect north Butterworth and the island.
The tunnel is to connect Bagan Ajam, a mature suburb of about 5km from the Butterworth ferry terminal, to the end of Gurney Drive near the Pangkor Road junction on the island.
Connected to the project are three paired roads to be built on the island as a traffic dispersal system to cope with the traffic that the tunnel would bring to Gurney Drive, which is already densely developed.
The three paired roads are from Teluk Bahang to Tanjung Bungah, from Pangkor Road to the Tun Dr Lim Chong Eu Expressway – part of this stretch will be underground – and from Air Itam to the expressway near the Penang bridge.
To finance the construction, projected to cost RM6.3bil, the state government is giving payment in kind of 44.5ha of state land to the contractor, Consortium Zenith Construction.
Chief Minister Lim Guan Eng told the state assembly in 2014 that the land was valued at RM1,300 per sq ft and the project, ending with the tunnel, is scheduled for completion in 2025.
It was reported last March that RM135mil worth of land had been given to the contractor as payment to fund the feasibility studies and detailed studies.
A public-listed company announced in January 2016 that it had secured an agreement to buy 20.2ha of the land from the contractor over 10 years at RM1,300 per sq ft.
It is believed that the MACC is looking into why the state government allowed the contractor to presell state land despite delays in the project construction.
More to be called up for questioning
GEORGE TOWN: Investigations into allegations of corruption in the proposed Penang Undersea Tunnel project are expected to deepen with more people likely to be called up for questioning.
A source in the Malaysian Anti-Corruption Commission (MACC) said the focus was on the feasibility and detailed design study, which had been paid for but not completed.
“We will call in more people involved in the project to assist in investigations into the study,” the source said.
He declined to comment on whether more arrests would follow after two “Datuks” were remanded for six days yesterday to help in the investigations.
The two were remanded in George Town and Putrajaya for investigations into the corruption allegations.
The MACC source declined to share details on evidence collected that led to the remand of the two Datuks yesterday but confirmed that it was about the delayed feasibility study and detailed designs.
The feasibility, detailed design studies and environmental impact assessment was reported to cost RM305mil with RM220mil already paid. Since 2015, NGOs, government agencies, political parties and state assemblymen had asked about the payment and studies, only to be met with replies they considered unsatisfactory.
Last July, the Works Ministry and Board of Engineers Malaysia (BEM) repeatedly asserted that Penang significantly overpaid, by four times, design fees involving three roads.
Barisan Nasional strategic communications director Datuk Seri Abdul Rahman Dahlan sought the professional opinion of BEM, and it was reported that BEM replied that the detailed design costs were four times higher than the maximum allowed under the gazetted scale of fees based on the total project cost.
Last August, the state government declared that the feasibility studies would be ready by September.
In October, however, Works Minister Datuk Seri Fadillah Yusof said his ministry “had not seen a single page” of it.
MACC to make more arrests - Penang undersea tunnel project
More arrests are likely in the investigations into claims of corruption in Penang’s RM6.3bil project involving an undersea tunnel and three highways after MACC officers raided 12 more places and took statements from a dozen witnesses. They are looking into an agreement on payments to the concessionaires but Penang Chief Minister Lim Guan Eng says there was no wrongdoing and that not a single sen has been paid for the undersea tunnel project.
PETALING JAYA: Investigators looking into the allegation of corruption in the Penang undersea tunnel project are said to be thoroughly looking through the papers related to the contract for the feasibility study for the undersea tunnel.
“The agreement looks suspicious and the feasibility study for the mega project does not exceed RM305mil as announced by the state government,” sources said.
“The state government might have made a payment which is way different than the real value of the study,” they said.
On Thursday, The Star reported that the graft-busters were zooming in on the land swaps of two plots of land in Bandar Tanjung Pinang.
The sources also say that the reclaimed land for the land swaps were of high value for development. It is believed that the state JKR has set the value for the study and that allegations of misappropriation were raised when the value that was paid far exceeded the initial value.
To finance the construction of the tunnel and three paired roads on the island, projected to cost RM6.3bil, the state government is giving payment in kind of 44.5ha of state land to the contractor, Consortium Zenith Construction.
Chief Minister Lim Guan Eng had told the state assembly in 2014 that the land was valued at RM1,300 per sq ft and the project, ending with the tunnel, is scheduled for completion in 2025.
It was reported last March that RM135mil worth of land had been given to the contractor as payment to fund the feasibility studies and detailed studies. However, the study has not been completed although the land has been handed over.
A public- listed company announced in January 2016 that it had secured an agreement to buy 20.2ha of the land from the contractor over 10 years at RM1,300 per sq ft.
It is believed that the MACC is looking into why the state government allowed the contractor to presell state land despite delays in the project construction and the study.
Source: The Star Malaysia reports by MAZWIN NIK ANIS and INTAN AMALINA MOHD ALI
Stalled ambition: A view of the Gurney Drive
seafront, which is meant to be connected to Bagan Ajam in Seberang Prai
under the Penang undersea tunnel project.
The RM6.3bil undersea tunnel project in Penang is on rocky ground
with the MACC going on a day-long swoop on companies and state
government agencies involved. A high-ranking Datuk in one of the
companies has been detained to help in investigations into allegations
of corruption in the long-delayed mega project and feasibility studies.
PETALING JAYA: Graft-busters have arrested a Datuk holding a high post in a company involved in the controversial Penang undersea tunnel project to help investigations into corruption claims.
The arrest came after a day-long massive swoop on several offices in Penang, where the Malaysian Anti-Corruption Commission (MACC) seized documents related to the RM6.3bil mega project.
The anti-graft agency raided the offices of four state government agencies – the Penang Public Works Department, Penang State Secretary, Penang Office of Lands and Mines and Penang Valuation and Property Services Department – and three property development and construction companies – Ewein Zenith Sdn Bhd, 555 Capital Sdn Bhd and Consortium Zenith Construction Sdn Bhd’s Penang office.
MACC officers also questioned several officers in charge of the respective agencies and companies since the raids began yesterday morning.
Sources familiar with the investigation said the probe into the undersea tunnel project was also zooming in on land swaps.
Ewein Zenith is a joint-venture vehicle of Ewein Land Sdn Bhd and Consortium Zenith BUCG Sdn Bhd.
The latter is a Malaysia-China joint venture that was awarded the RM6.3bil mega project to build the 7.2km undersea tunnel connecting Gurney Drive on the island to Bagan Ajam in Seberang Prai, a 10.53km North Coastal Paired Road (NCPR) from Tanjung Bungah to Teluk Bahang, the 5.7km Air Itam–Tun Dr Lim Chong Eu Expressway bypass and the 4.075km Gurney Drive–Tun Dr Lim Chong Eu Expressway bypass.
Consortium Zenith BUCG changed its name to Consortium Zenith Construction Sdn Bhd on Jan 18 last year after the withdrawal of Beijing Urban Construction Group (BUCG).
It is believed that the MACC is looking into why the state government allowed the Penang Tunnel special purpose vehicle (SPV) company to pre-sell state land rights worth RM3bil despite a four-year delay in the construction of roads.
Investigators are also believed to be looking into the RM305mil feasibility and detailed design studies that have yet to be completed, even though a payment of RM220mil was made to the SPV.
On Oct 11 last year, the main contractor of the project announced that there was no urgency to finish the feasibility study for the undersea tunnel, as it was only set to begin in 2023.
The feasibility study of the tunnel started in February 2015 and as of October last year, it was said to be 92.9% complete.
Works Minister Datuk Seri Fadillah Yusof has said the delay in submitting the feasibility report to him was very unusual considering that the project was awarded in 2013.
On Friday, Parti Cinta Malaysia (PCM) vice-president Datuk Huan Cheng Guan lodged a report at the MACC headquarters in Putrajaya and handed over documents which he claimed contained new evidence of corruption in the project.
It was Huan’s third report about the matter. He first lodged a police report on July 17 last year, claiming that the project was awarded to an “undercapitalised” company.
He then lodged a report with the MACC on July 21, calling for a corruption probe.
In George Town, a source in the MACC confirmed that they had visited the offices of Ewein Zenith, Consortium Zenith Construction and 555 Capital, all of which are involved in the Penang undersea tunnel project.
“We went in the morning, shortly after their offices opened,” said the MACC officer.
However, none of the senior management staff were in and only the front office and sales staff were present to attend to them.
State Works Committee chairman Lim Hock Seng said he was not aware of the raids, while Consortium Zenith senior executive director Datuk Zarul Ahmad Mohd Zulkifli could not be reached for comment.
Meanwhile, state secretary Datuk Seri Farizan Darus said the National Economic Planning Unit on the 25th floor of Komtar was also raided, but declined to give details.
Huan thanked the commission for acting on his report.
“I believe the MACC will carry out its investigation professionally without any fear or favour,” he said.
The MACC is expected to hold a press conference today to explain the spate of raids and provide updates on the investigations.
