Was “main contractor” CRCC paid only RM3mil since the mega project was awarded 5 years ago?

By MT Webmaster On Feb 11, 2018

Press statement by MCA Deputy President Datuk Seri Dr Wee Ka Siong

1. It is nonsensical for Penang CM Lim Guan Eng to even suggest that Transport Minister Dato’ Sri Liow Tiong Lai is putting pressure on China Railyway Construction Corporation Ltd (CRCC) to withdraw from the controversial Penang Tunnel project.

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

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

However, recently Guan Eng said that CRCC has not been in contact with the Penang state government. This has set alarm bells ringing should the Penang state government not been able to communicate with its alleged main contractor for their largest mega-project. *CM Guan Eng, I thought the appointment of main contractor was the prerogative of SPV and it has nothing to do with the state government?*

4. Based on information I received from the engineering industry sources which was subsequently confirmed by Penang EXCO Chow Kon Yeow recently, CRCC was contracted for a sum of US$22mil (approximately RM69mil then) to undertake the detailed design work for the 3 roads and tunnel.

5. This is surprising as the detailed design scope is the largest scope among the RM305mil worth of reports that the Penang state government is paying the Tunnel SPV for.

6. According to figures released by Penang EXCO Lim Hock Seng, the detailed design cost component of the 3 roads and tunnel adds up to a total of RM253.8mil (RM177.5 for 3 roads and RM76.3mil for the tunnel) out of the RM305mil.

7. 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 RM305mil?

8. Even more worryingly is that I was told that CRCC could not continue with the project as they have only received 5% (or a little over RM3mil) in payment from their RM69mil contract ever since the tunnel project was awarded 5 years ago.

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

9. This is worrying as how can the master contractor of a RM6.34 billion project only receive such a comparatively small sum over 5 years? If this is true then, would this not reflect badly on the financial strength of the tunnel SPV?

10. Is this why the Penang CM has not dares to answer my repeated challenge over the past week to provide proof as to how much has CRCC been paid since the project was awarded 5 years ago?

11. Is this also why BUCG was already quietly withdrawing from the project and had only 0.0057% shareholdings prior to the Chief Minister putting up a public show to allegedly “kick them out” from Penang?

12. Is this also the reason why Malaysian public listed Mudajaya Group Bhd withdrew from the project despite being officially awarded a RM810mil contract to construct one of the 3 roads and, in their official submission to Bursa Malaysia in Nov 2017, Mudajaya had cited that various uncertainties of the project is the main reason for their withdrawal?

Datuk Seri Dr Ir Wee Ka Siong
MCA Deputy President
Minister in the Prime Minister’s Department