Monday, March 11, 2013

Dap's RM6.3 billion Roads-Tunnel Vision: Details on Firms Should Emerge From the Veil of Secrecy

Despite the tie-up with Beijing Urban Construction Group (BUCG), the special purpose vehicle company led by Consortium Zenith is made up of RM4.5 billion paid up capital, largely contributed by China Railway Construction Ltd (CRCL).

In a joint statement issued by State Secretary Datuk Farizan Darus and State Financial Officer Datuk Mokhtar Mohd Jait stated that Consortium Zenith was specially set up to bid for the RM6.3 billion integrated road projects.
“Consortium Zenith and CRCL possess 70 per cent equity with paid-up capitals of RM3.5 million and RM4 billion shares.
“The main bidder BUCG which formed the SPV with Consortium Zenith has a ten percent equity with a paid-up capital of RM541 million.
“Sri Tinggi Sdn Bhd and Juteras Sdn Bhd have a ten percent equity each with paid-up capitals of RM3.7 million and RM1 million, respectively,” they said.
Both Farizan and Mokhtar were debunking Barisan Nasional (BN)’s claim that Consortium Zenith was a RM2 with a paid-up capital of RM200,000. 
Blogger and fellow Penang activist Anil Netto has raised more questions regarding these companies; "We need to know who are the individuals behind Zenith, Sri Tinggi and Juteras, which will be given sizeable stakes in the project." 
He wrote: "Zenith has a paid up capital of only RM3.5m but, together with the firm from China will be given a 70 per cent stake in the project. Sri Tinggi and Juteras have a combined paid up capital of only RM4.7m, and yet they will be given a significant 20 per cent stake in this RM6.3bn venture – and a share of the toll revenue?"
Are these small obscure firms controlled by bigger players or even listed firms?
What particular expertise do these small companies bring to this project and who are the main players behind them?
Does the Penang state government get a share of the toll revenue over the 30-year period? This share could be used to finance public transport. In the early years of the Penang Bridge, the Penang state government used to receive a small share of the toll revenue – but even this was taken away by the federal government under Mahathir."
CM Lim Guan Eng should and must provide convincing answers to these questions:
1. What are the contributions and added values these firms e.g. Zenith, Sri Tinggi and Juteras bring to the project? What are their past record and successful projects? Previously, DAP had been very critical of Ali Baba companies taking advantage of national tenders. They argued that these companies were the main cause of rising tender cost. 
2. Apart from spending RM6.3 billion to build the roads and underwater tunnel, does the state government have any comprehensive plan to provide long term solution to reduce congestion in the state?
3. Has the state government calculated the eventual cost or opportunity cost e.g. from land appreciation and toll collection that we have to end up paying the developer? Is it justified or are we potentially staring at a repeat of BN's 'piratisation' of highways throughout the Klang Valley? Is there any rates increase schedule for the underwater tunnel and what are the rates?
4. Since these roads and underwater tunnel would only be completed by 2025, what are the plans to mitigate congestion problem from 2003 to 2025? Notwithstanding, the congestion problem is going to be escalated by construction and reclamation works. 

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