Agreement on integrated road projects signed

GEORGE TOWN: It is all systems go for Penang’s RM6.3 billion integrated road transport project. The preliminary agreement for feasibility studies and detailed design (FSDD) works, which was signed yesterday, marks the beginning of a “long journey” for the state and concessionaire Consortium Zenith BUCG Sdn Bhd.

After much criticism  and praise during the proposal stages early this year, the 12-year project marks a “long journey” that Chief Minister Lim Guan Eng hopes will end successfully.

“We have created history ... We hope the sweat and tears preceding the agreement will translate into  success in 2025. Whether we fail or succeed, we will rely on Penang’s ‘can do’ spirit. We may not be here in 2025 but if this project succeeds, we hope our children will remember us,” he said.

The concessionaire comprises China’s largest government-linked company China Railway Construction Company (CRCC), construction powerhouse Beijing Urban Construction Group (BUCG), Juteras Sdn Bhd and Sri Tinggi Sdn Bhd which have teamed up in a joint-venture with Kuala-Lumpur based Zenith Construction Sdn Bhd to form the consortium led by chairman Datuk Zarul Ahmad Mohd Zulkifli.

It won the tender to build a 12km paired road between Tanjung Bungah and Teluk Bahang, a bypass each between Air Itam and the Tun Dr Lim Chong Eu expressway, and Gurney Drive and Tun Dr Lim Chong Eu expressway, and the 6.5km undersea tunnel connecting the island and the mainland.

The signing of the agreement was delayed till after the general election in May in order to obtain a mandate from voters.

Following the FSDD works for the three road projects, which will be carried out in the next 18 months, a state appointed consultant is expected to conduct a detailed environmental impact assessment (DEIA) on the entire project.

“These projects are subject to full compliance with the DEIA, failing which the FSDD will just end there. Of course we would not go ahead with a project that was found to be non-compliant. The DEIA consultant is answerable to us, therefore we will ensure that the projects are compliant. The fee for the appointment of the consultant has been factored into the project cost,” Lim said.

On criticisms that DEIA was allegedly done in favour of the client, he said it was based on hypotheses, adding that the state will ensure the projects are compliant.

Earlier this year, several non-governmental organisations and Penangites had criticised the project, saying it would have a negative impact on the environment.

Lim, who attracted his share of brickbats, said the project would resolve the burgeoning traffic congestion on the island. He said mainlanders in Seberang Perai Utara would also be able enjoy an alternative route to the island via an undersea tunnel instead of the first and second Penang Bridge.

“The undersea tunnel project is not new. It was also proposed by the previous government. As for the roads, Penangites are generally supportive particularly where the bypasses are needed,” he said.

Doubts were also raised as there would be no exchange of cash and traffic guarantees but a 44.5ha tract of land in Tanjung Pinang will be given to the consortium as a trade-off.

The consortium will also be allowed to collect toll on the undersea tunnel for 30 years, at a rate similar to the second Penang Bridge.

Lim said the land, that has yet to be reclaimed by Tanjung Pinang landowner Eastern and Oriental Bhd (E&O) based on a previous government deal, is subject to a separate DEIA conducted by E&O.

“It is a freehold land based on an agreement made by the former government. However, any development carried out on the land is subject to state and local authority regulations,” he said.

(E&O will reclaim the remaining 299ha of land from Tanjung Tokong to Gurney Drive after the previous government is said to have sold the land at RM1 per sq ft in 1999. It has so far reclaimed and developed 97ha. According to the deal, E&O was required to handover 44.5ha to the state.)

During a press conference after the sigining ceremony, Lim was asked whether building roads is a solution to reduce congestion. He said it is an alternative as improving public transport is a federal matter.

He said the state is “willing” to continue engaging with the public but “still feels” the project is necessary to find a solution to traffic congestion, and the state government will not “sit down and do nothing”.

Consortium charman Zarul, who said he put in “blood, sweat and tears” to secure the project and later endured heavy criticism from the public and the media, said: “We will accede to the state’s requirements to train local companies and provide jobs in the course of the project so a Malaysian company will one day be able to bid for a tunnel project overseas.”

The three agreements for the FSDD with the consortium, and engineering, procurement and construction with CRCC, and  BUCG, builder of the “Bird’s Nest” Olympic stadium in Beijing, were signed with the state.

The consortium, a RM2 special purpose vehicle company with a paid-up capital of RM4.5 billion beat the only other bidder, VST Cemerlang, that proposed to build the entire project with the help of China State Corp.

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This article first appeared in The Edge Financial Daily, on October 07, 2013.