Wee: CRCC not getting bulk of study cost

Under the spotlight: A view of Gurney Drive seafront meant to be connected to Bagan Ajam in Seberang Prai under the Penang undersea tunnel project.

PETALING JAYA: Datuk Seri Dr Wee Ka Siong’s latest highlight on the disturbing issues concerning Penang’s controversial mega project centres on the main contractor – China Railway Construction Corporation Ltd (CRCC).

The MCA deputy president questioned why CRCC, being the main contractor, was only contracted for a sum of US$22mil (approximately RM69mil in 2013) to undertake the detailed designed work for the three main roads and undersea tunnel.

“As CRCC is being paid only RM69mil for all the detailed designs, which constitutes the bulk of the work, what exactly is the scope that the other 34 consultants are being paid for to deserve the balance of RM236mil out of the RM305mil?” he asked in a statement yesterday.

Dr Wee also expressed concern after he was told that CRCC could not continue with the project as they had only received 5%, or a little over RM3mil, in payment from the RM69mil contract since the project was awarded five years ago.

He said it was surprising as the detailed design scope is the largest scope among the RM305mil worth of reports that the Penang government is paying the special purpose vehicle (SPV).

The cost breakdown revealed by Penang exco member Lim Hock Seng in January stated that the detailed design cost for the three main roads was RM177.49mil while the undersea tunnel was RM76.25mil.

“How do you expect CRCC to continue its work if they allegedly did not receive the agreed payments?

“How can the master contractor of a RM6.34bil project only receive such a comparatively small sum over five years?

“If this is true, would this not reflect badly on the finan­cial strength of the SPV?” asked Dr Wee.

He also asked if the minimal payment was the reason why Penang Chief Minister Lim Guan Eng did not respond to his challenge to prove how much had been paid to CRCC in the past five years.

“Is this also why Beijing Urban Construction Group (BUCG) was already quietly withdrawing from the project and had only 0.0057% shareholding prior to Guan Eng’s putting up a public show to allegedly ‘kick them out’ from Penang?

“Is this also the reason why Mudajaya Group Bhd withdrew from the project despite being officially awarded an RM810mil contract to construct one of the three roads?” he asked.

In a filing with Bursa Malaysia in November last year, Mudajaya cited some uncertainties in the project for their withdrawal.

These include uncertainty in being able to secure the exact date for the site possession; uncertainty in signing the construction contract; and insufficient information provided for the project, causing a lapse in the timelines in the letter of award.

Dr Wee also rebuked Guan Eng for suggesting that Transport Minister Datuk Seri Liow Tiong Lai was putting pressure on CRCC to withdraw from the mega project.

“If the project is real, there is no reason for CRCC to withdraw from a RM6.3bil project that is already awarded.

“Since he insists that CRCC is still the main contractor for the project, it would have been easy for him to get CRCC to issue a denial,” he said.

Dr Wee also pointed out that Guan Eng recently said that CRCC has not been in contact with the state government and this has set alarm bells ringing.

“CM Guan Eng, I thought the appointment of the main contractor was the prerogative of SPV and has nothing to do with the state government?” asked Dr Wee.