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

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

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, Lim recently 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.

Wasn’t CRCC appointed by SPV?

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

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.

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

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?

Even more worryingly is that I was told that CRCC could not continue with the project as they have only received five percent (or a little over RM3mil) in payment from their RM69mil contract, 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?

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

Is this why Lim (photo) has not dared 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 five years ago?

Is this also why BUCG, who were already quietly withdrawn from the project, and had only 0.0057 percent of shareholdings, had to witness the chief minister putting up a public show to allegedly "kick them out" from Penang?

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 three roads?

And is this why in their official submission to Bursa Malaysia in Nov 2017, Mudajaya cited various uncertainties of the project as the main reason for their withdrawal?

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.