Verbal sparring on Penang tunnel road project takes a new twist

Despite weeks of verbal sparring with the Penang government over fees allegedly overpaid to the contractor for three major road works and the undersea tunnel - the Works Ministry (JKR) now compares the project with a highway construction in Johor.

Minister Fadillah Yusof cited an example where JKR paid only about RM19 million in total pre-construction consulting fees for a recent paired road highway project in the southern state, which is currently held by the ruling Barisan Nasional.

“These fees comprise all required services and include the fees for all surveys, soil investigation, preliminary environmental impact assessment and all civil, structural, electrical and mechanical design,” said Fadilah in a statement today.

The RM19mil of pre-construction consulting cost represents about 2.67% of RM718,570,500 for roads totaling 30km in length, Fadillah noted.

He pointed out that not all of the consulting fees were paid before construction began as 25% were withheld for tendering and construction stages in accordance with the Board of Engineers' guidelines. Chow Kon Yeow 

“Compare this to the total RM220mil pre-construction fees that are already fully paid by the Penang government which represents 11.06% of the RM1.99 billion construction cost for the three roads totalling 20km in length, “ Fadillah said.

“The project has yet to start construction despite a three and a half-year delay.”

Fadillah chided the Penang government for “denying the undeniable and avoiding scrutiny” that its project is allegedly overpriced.

He urged the Penang government leaders to reply to Minister in the Prime Minister’s Department Abdul Rahman’s question yesterday over the consulting fees.

“If it is not excessive then how did the three-year-old Penang tunnel special project vehicle company make such super profits just from doing reports?,” Abdul Rahman, who is BN strategic communications (BNSC) director had asked.

In an immediate response, state executive councillor Lim Hock Seng said Fadillah should expedite the meeting between himself, the Board of Engineers and the Penang government instead of using the media to raise these issues.

Last week, Penang exco member Chow Kon Yeow had sent Fadillah a letter last week requesting a meeting to resolve the issues but according to him, the Works Ministry has yet to respond.

"Now the minister wants to compare the project with a highway project in Johor but the Penang government does not have sufficient information regarding the nature of the contract or agreement to make comparisons,” said Lim.

Earlier, Abdul Rahman and his deputy Eric Sze-too had queried the Penang government for overpaying by 400 percent (or four times more) the consultant fees to Zenith, an Umno-linked company based in Kuala Lumpur.

After Chow explained that the civil and structural fees included 10 other elements, Fadillah accused the state of "double counting", saying some of the elements mentioned by Chow is part of the detailed environmental impact assessment and feasibility studies.

Lim reminded Fadillah that the state had repeatedly said that the three major road works were carried out via a request for proposal under the open tender system.

"The contract was awarded to Zenith because the firm offered the lowest price," Lim reiterated.

“Every time the issue was raised since 2016, the state government has clarified the matter in detail, a report has been lodged at the Malaysian Anti-Corruption Commission and investigations was carried out," Lim said.

"The Penang Public Accounts Committee has also called for those involved to explain the issue, and its report was tabled at the state legislative assembly" added the exco for public works, transportation, and utilities.

"This shows the transparency and openness of the state government in the practice of CAT (competency, accountability, and transparency) principles,” Lim stresses.- Mkini

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