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Consortium Zenith 'well-capitalised' to undertake Penang's tunnel project's RM305m preliminary works

KUALA LUMPUR (Feb 27): Consortium Zenith Construction Sdn Bhd (CZC), the special purpose vehicle tasked to execute the RM6.3 billion Penang integrated infrastructure project, said despite having a paid-up capital of only RM26.5 million, it is well-capitalised to undertake the project's RM305 million preliminary works.

"CZC takes cognisance of the fact that its capital funding needs to be adequately increased at the appropriate time as the project enters into the construction phase," said the consortium.

"This has always been part of CZC's financial planning. Over-capitalisation at this stage would unnecessarily tie up CZC's funds," it added in a statement yesterday to counter recent allegations against the mega infrastructure project, which includes an undersea tunnel and three main road projects.

CZC and the Penang state government have been criticised by federal ministers for the alleged exorbitant cost of the feasibility studies, and the 30-year no traffic guarantee concession for the undersea tunnel.

In its statement yesterday, CZC said it has managed to engage a pool of local and foreign consultants from multiple disciplines to carry out various components of the project.

This included the feasibility studies and detailed design (FSDD) for the undersea tunnel, and Detailed Environmental Impact Assessment (DEIA) for the road works.

Previously, CZC's shareholders included the celebrated Beijing Bird's Nest Stadium builder Beijing Urban Construction Group Co Ltd (BUCG), and although its stake was less than 1%, the consortium allegedly had a combined paid-up capital of more than RM500 million.

"The earlier withdrawal of minority shareholders of CZC particularly BUCG, which is purely a corporate decision, does not impair the financial and technical strength of CZC," said the consortium.

It added that any decisions and changes made after the award of the project via an open tender are purely based on commercial reasons and within the provisions in the preliminary agreement signed with the Penang government.

The completed FSDD and DEIA works is testimony to the fact that CZC has the financial and technical strength to deliver, it said, adding that CZC is apolitical and is committed to the project.

It reiterated that as the principal contractor, Zenith Construction Sdn Bhd is the single largest shareholder of CZC while CRCC Malaysia Bhd has been its engineering, procurement and construction contractor since the time of its request for proposal submission.

CZC said although the feasibility studies for the undersea tunnel project is at its advanced stage of completion, there have been no exchange of lands, land alienation or payments made by the Penang government to CZC.

CZC said it has extended its cooperation to assist the Malaysian Anti-Corruption Commission (MACC) in its investigation into the project, and is confident that the agency will complete its investigation in due course.

Earlier this year, MACC remanded key people in CZC, its joint-venture company Ewein Zenith Sdn Bhd (for the development of the land paid by the state for work done so far), and an engineering consultancy firm.

CZC said that barring unforeseen circumstances, it expects construction works for the undersea tunnel to start in 2023 and be completed in 2027. — theedgemarkets.com

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