Guan Eng trial: Chinese company had advantage over other bidders as its input was included in undersea tunnel RFP, says Penang state official

KUALA LUMPUR (Aug 20): Beijing Urban Construction Group (BUCG) supposedly had an advantage over other bidders in tendering for the Penang undersea tunnel project as it participated in several state government meetings, over a year before the project was eventually awarded to it, the Sessions Court heard today.

The prosecution's fourth witness, Muhamad Azrai Mohamad Zaini, who was assistant director of infrastructure in the Penang State Economic Planning Unit at the time, testified today that representatives from the Chinese company attended several meetings with the Penang state government to discuss the feasibility study and preliminary detail design work for the project following their memorandum of understanding (MoU) signed in 2011.

To recap, 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 (RFP) 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.

During examination-in-chief by deputy public prosecutor Wan Shaharudin Wan Ladin today, Muhamad Azrai testified that BUCG had contributed significant input into the the design of the project, which was eventually included in the final RFP.

Wan Shaharudin: Can you confirm that input given from BUCG was included in the final RFP?

Muhamad Azrai: Correct.

Wan Shaharudin: Do you agree that they had the advantage [over other bidders] when they eventually joined the RFP as a bidder?

Muhamad Azrai: Yes

Wan Shaharudin: Why do you say that BUCG had an advantage compared to other companies who also handed in their bids?

Muhamad Azrai: The advantage was that BUCG would have known earlier about the scope and specifications of the project that would be contracted, the terms and conditions applicable to bidders, much earlier [than the rest].

Wan Shaharudin: The RFP was issued in July 2012, and the last meeting they had [with the state government] was on July 11, 2011. How much earlier were they involved?

Muhamad Azrai: About a year.

However, lead defence counsel Gobind Singh Deo during cross-examination argued that BUCG had only participated in the state government meetings in order to honour the MoU signed between the two parties, to which Muhamad Azrai agreed.

Gobind also pointed out that BUCG had given input to the project as mere suggestion and that the final draft was still decided by the Penang state government.

Muhamad Azrai also agreed to this point, but stressed that most of the input was in fact included in the final RFP.

Gobind: You cannot say they (BUCG) had an advantage. They suggested some things but whether it would be included in the RFP one year later, they didn't know, agree?

Muhamad Azrai: They knew what they suggested for the drafts and what they suggested was in the final RFP. So the company did have an advantage.

Gobind: Yes, they knew what they suggested, but the question of whether or not it would be brought as the final version they would not know, agree?

Muhamad Azrai: But what they suggested was in the final version.

In this trial, former Penang chief minister Lim Guan Eng (pictured) is facing four charges in relation to the undersea tunnel project. He is accused of soliciting a 10% cut in profits from the project from Consortium Zenith BUCG's managing director Datuk Zarul Ahmad Mohd Zulkifli, 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 on Sept 10.

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