Guan Eng: Tunnel SPV company not bankrupt after five years proves award was the right decision

PETALING JAYA: Penang Chief Minister Lim Guan Eng continued his war of words over the controversial Penang Tunnel project with MCA deputy president Datuk Seri Wee Ka Siong.

Guan Eng said that the fact that the Penang Tunnel Special Purpose Vehicle (SPV) company has still not gone bankrupt five years later after the award of the RM6.34 billion mega-project proves that the Penang Government had made the right decision to award the project to the SPV.

"Wee also said that the Zenith Consortium was in financial distress when it was awarded the tender contract in 2013. Whilst we cannot answer on behalf of the company, the Penang Tender Committee headed by the Penang State Secretary made the right decision then, because until today five years later, this so-called “financially-distressed company” is still progressing and has not gone bankrupt." said Guan Eng in a press statement on Sunday (Feb 4).

Wee had previously issued a statement that claimed that the Penang government had effectively awarded the RM6.34 billion tunnel project to a 82 days old company with negative asset value with only a paid up capital of RM300,000.

Wee made this claim after the Penang Government had confirmed that China Railway Construction Corporation Ltd (CRCC) was not a shareholder of the Tunnel SPV.            

He also claimed that without CRCC and Beijing Urban Construction Group (BUCG) as shareholders, the Penang Govt had misrepresented to the public that the Tunnel SPV had RM4.5 billion in paid-up capital backing.

On his Facebook page, Wee had also uploaded various financial statements of the Tunnel SPV and its holding company that showed both companies has auditors' "emphasis of matter" that expressed significant doubt that both companies can continue to operate as a going concern.

He asked if the weak financial strength of the awarded company had contributed to delays in the Tunnel SPV completing the full RM305mil worth of reports or to the delay in starting construction of and the roads or tunnel even after almost five years since the project award.