KUALA LUMPUR: The Penang undersea tunnel project resulted in significant losses to the state government, with two plots of land transferred under suspicious circumstances, the Sessions Court heard.
Testifying in the ongoing corruption trial involving former Penang chief minister Lim Guan Eng, Malaysian Anti-Corruption Commission (MACC) enforcement officer Zulhilmi Ramli said the state lost valuable land due to “dealings” between the project’s main contractor and private entities.
“The state was the losing party here, with Lot 702 and Lot 713 transferred inappropriately. The state government lost two plots of land, with Consortium Zenith BUCG Sdn Bhd (CZBUCG) acquiring them under questionable circumstances.
“Without the initial dealings between Datuk Ewe, Datuk Zarul and the accused, these lands would not have been wrongfully transferred,” he said in reading out his witness statement yesterday.
Zulhilmi, who was investigating officer of the case, was referring to Ewein Bhd founder and executive chairman the late Datuk Ewe Swee Kheng and Consortium Zenith Construction Sdn Bhd former director Datuk Zarul Ahmad Mohd Zulkifli.
Zarul Ahmad, who set up CZBUCG to handle the undersea tunnel project, is the lead prosecution witness.
Ewe was developer in the dealings of Lot 702, which was part of a land swap agreement related to the feasibility and detailed design studies for the undersea tunnel project.
Ewe was due to be called as the 15th prosecution witness, but was found dead after a fall from a condominium on Oct 5, 2021, in Pulau Tikus.
Zulhilmi said the undersea tunnel project involved a preliminary agreement between the Penang government and CZBUCG to conduct a feasibility study valued at RM305.88mil.
He said payment for the study was made through a controversial land swap involving Lot 702 and Lot 713 in Bandar Tanjung Pinang.
The court also heard that CZBUCG sold Lot 702 to Ewe’s company for RM133mil.
“An upfront 60% payment of RM79.8mil was made, with the 40% balance contingent on the completion of the City of Dreams development.
“It is perplexing that Ewe made early payments as far back as November 2013, even without certainty of acquiring Lot 702,” said Zulhilmi.
He revealed that despite a preliminary agreement for the feasibility study, this was never completed.
“The incomplete feasibility study reflected the project’s shortcomings, yet the plots were already transferred to CZBUCG.
“The sequence of events and financial exchanges was such that, without these early dealings, the plots would not have been unjustly transferred.”
To further complicate matters, Zulhilmi said the state government appointed a private law firm to draft the preliminary agreement for the project instead of using the state legal adviser.
“This deviation from usual state procedures raises questions about transparency,” he said.
He said documents presented from his investigation included minutes from state land committee meetings and a preliminary agreement for the project signed on Oct 6, 2013.
“These documents outlined plans for feasibility studies and land exchanges, yet the studies remained incomplete,” he added.
Zulhilmi also pointed to a meeting on May 10, 2011, in which CZBUCG anticipated construction challenges with the undersea tunnel’s feasibility.
Despite these concerns, he said the project proceeded, leading to significant losses to the state.
Earlier during the proceedings, the court granted Lim the permanent return of his passport but required him to report monthly to MACC.
Lim, who is on a RM1mil bail with two sureties, requested his passport to fulfil his duties as honorary president of the China-Asean Industrial Development and Cooperation Promotion Committee.
Lim, 64, is facing an amended charge of using his position as then Penang chief minister to solicit RM3.3mil in bribes as an inducement to assist Zarul Ahmad secure the undersea tunnel project worth RM6.34bil.
He allegedly committed the offence at the Penang Chief Minister’s Office between January 2011 and August 2017.
In the second amended charge, Lim is accused of soliciting a 10% profit from the company as gratification to secure the project.
The offence was allegedly committed near The Gardens Hotel, Lingkaran Syed Putra, Mid Valley City, in March 2011.
Lim, the Air Putih assemblyman and Bagan MP, faces two further charges of causing two plots of land worth RM208.8mil belonging to the Penang government to be disposed of to two companies linked to the project. The trial continues on Oct 29.
