Guan Eng trial: No indication of ‘open tender’ in MoU signed before Penang undersea tunnel project was awarded, says former exco

KUALA LUMPUR (Aug 19): There was no indication in the memorandum of understanding (MoU) signed between the Penang state government and Beijing Urban Construction Group (BUCG) in 2011 that the undersea tunnel project would be awarded by way of open tender, former state executive councillor Datuk Lim Hock Seng (pictured) testified today.

Hock Seng further agreed that there was also no such indication of "open tender" in his report, after the state representatives went to visit BUCG in China to discuss about the project. 

He was replying to deputy public prosecutor Wan Shaharuddin Wan Ladin in former Penang chief minister Lim Guan Eng’s graft trial at the Sessions Court.

Wan Shaharuddin: So would you say it was something sinister that the project ended up being awarded through direct negotiation?

Hock Seng: No

For context, the state signed the MoU with BUCG for the construction of the 6.5km Penang-Butterworth undersea tunnel and three major roads in 2011. The signing of the MoU was witnessed by former prime minister Datuk Seri Najib Razak and his then Chinese counterpart Wen Jiabao.

Then in 2013, the Penang state government selected Consortium Zenith BUCG as the contractor for the project, after it had purportedly come out on top, following an assessment of the request for proposals from eight different companies and consortiums. 

Consortium Zenith BUCG is a joint venture between Zenith Construction Sdn Bhd and China Railway Construction Ltd, in addition to BUCG, Sri Tinggi Sdn Bhd and Juteras Sdn Bhd. 

Hock Seng clarified today that prior to the visit to China, Guan Eng had repeatedly mentioned that the project would be awarded through an open tender. This, Hock Seng claimed, was said by the former chief minister during state assembly meetings in April 2011, as proven by the meeting minutes produced as evidence in court. 

Furthermore, Hock Seng claimed that Guan Eng also mentioned in a meeting with BUCG on May 10, 2011, which he chaired, that it was still not certain that the project would be awarded to the company.

"So during these meetings, it was already put to BUCG who were present during those meetings, that they would not necessarily get the project. Before we went to China, in these meetings, it was clear to BUCG that they would not necessarily be appointed as the contractor," he said. 

Guan Eng has claimed trial to four charges in relation to the undersea tunnel project. He is accused of soliciting a 10% cut in profits from the project from Zarul, of seeking RM3.3 million in kickbacks to appoint Zarul's company to undertake the project, and of dishonestly misappropriating RM208.7 million worth of state land to two companies.

The trial before Sessions Court judge Azura Alwi continues tomorrow with a new prosecution witness.

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