Liow: CRCC said it is not a shareholder of Penang undersea tunnel project

PETALING JAYA: China Railway Construction Corporation (CRCC) did not have a direct contract with the Penang government for the proposed undersea tunnel and the three main roads project, said Transport Minister Datuk Seri Liow Tiong Lai.

He said CRCC confirmed that they were never a shareholder in the Special Purpose Vehicle (SPV) and the SPV's parent company, Zenith Construction Sdn Bhd.

"CRCC did not ever have a contract directly with the Penang government nor had they given approval or have knowledge of why the Penang government had considered them as shareholders of the Penang tunnel and the three roads project's SPV," he said in statement yesterday.

Liow said he met with top CRCC officials when attending the first Asia Pacific Ministerial Conference on Civil Aviation, who were eager to explain their position on the controversy.

He said CRCC officials explained they had only signed an "acknowledgement of commitment" as an appendix to preliminary agreement of the project.

He said the CRCC agreed they would deliver the project should they be awarded any portion of it by the SPV.

"As of today, CRCC had preliminarily contracted with the SPV to be the EPC (Engineering, procurement and construction) contractor.

"They had been given a contract by the SPV to perform detailed design reports for a total of US$22 million (RM85.7 million) for the three roads and undersea tunnel" Liow said.

According to Liow, CRCC had said the unique circumstances of the project cannot and should not be used as a measure of their performance.

He added that CRCC promised it would deliver its commitments for any current or future contracted projects as per agreed schedules and budget.

Penang's mega infrastructure project has been mired in controversy with MCA and DAP attacking each other on their views about it.

Chief Minister Lim Guan Eng has been defending the project by claiming they had been awarded by open tender to Consortium Zenith and the agreement was signed in October 2013 between the state government and two principal shareholders of Zenith and Beijing Urban Construction Group (BUCG).

He said they also signed an additional agreement with the main contractor CRCC, adding that they had some issues with BUCG, which was why it was left out of the contract and agreement.

Lim said CRCC gave a commitment in black and white that it would render all assistance and expertise to the project to ensure its successful completion.

In George Town, a DAP parliamentarian defended Lim over his stewardship of the proposed RM6.3 billion undersea tunnel project after it was revealed that the CRCC confirmed that it was never a shareholder of the special purpose vehicle for the project.

Bukit Bendara MP Zairil Khir Johari in a whatsapp message said Penang has never claimed that CRCC was a shareholder, it was just misinterpreted by some quarters in Barisan Nasional.

"CRCC is (actually) the main contractor for the project and there is an agreement on this signed by them, Zenith (Construction Sdn Bhd) - the project delivery partner and the state government."

As far as the state was concerned, it would abide by the agreement signed by the three parties including CRCC.