THE controversial RM6.3 billion Penang tunnel project, an undersea link from the island to the mainland, may be replaced by a third bridge, but the best way out may be to cancel both projects to save a lot of money.

There may be complications, though, to that route, simply because an agreement may have been signed for the 30-year concession contract to collect toll, as well as the award of 44.5ha of reclaimed land in prime Gurney Drive as partial payment for the RM6.3 billion.

The tunnel is part of the massive RM46 billion mega project known as the Penang Transport Master Plan (PTMP), which involves a system of rails and roads to be financed from the reclamation of three islands from the sea.

Some 10 years after the decision to build a tunnel to link Penang Island to the mainland in 2011 for some RM6.3 billion, there now seems to be a plan to build a third bridge instead at a cost of less than half that of the tunnel at RM3 billion, according to a news report over the weekend.

“Based on preliminary discussions, it is most probably going to be the bridge, but it is still up to the Penang government,” said Tan Sri Khor Eng Chuen, ECK Development group managing director. ECK took over as the new majority owner of the consortium building the tunnel in July last year.

But the most cost-effective solution to the problem may be to simply resume ferry services for four-wheeled vehicles, to ease any congestion on the bridges, and revisit the third link later, when economic conditions revive. Traffic is currently low on both existing bridges.

This will also entail a serious revisit and rethink of the RM46 billion PTMP, a key part of which is the tunnel/third link project, which has come in for some heavy criticism from Penang residents.

Some history of the tunnel project is appropriate.

Among the worst decisions made by the DAP-controlled Penang government was the controversial tunnel project to the mainland that would cost some RM6.3 billion. In 2011, when DAP supremo Lim Guan Eng was chief minister, the state inked a memorandum of understanding with Chinese state-owned contractor Beijing Urban Construction Group (BUCG) just four days after launching a Transportation Master Plan study costing RM3.2 million. 

The move came under severe criticism over the decision to sign an MoU ahead of the opening up of tenders, which started only in November 2011. Tellingly, after eight tenders were evaluated, the concession was awarded in March 2013 to a consortium formed between BUCG and local company Zenith Construction, forming Consortium Zenith BUCG Sdn Bhd (CZB).

Also, the terms were heavily criticised. CZB, under the terms of the concession, gets to collect toll for a period of 30 years, and on top of that, it also gets a total of 44.5ha of prime land, which will have to be reclaimed from the sea by the consortium, along Gurney Road.

The cost of concession agreements for toll projects is supposed to be reasonable, and the concessionaire recovers the cost and gets profit from toll payments over the concession period. But in this case, a land agreement was involved as well, without any indication of what the land was cost at.

On top of that, the lack of feasibility studies and detailed environmental impact assessments has irked others opposing the project. Prof Jimmy Lim, president of the Penang Citizens’ Awareness Chant Group, said in 2013 that he believed the Penang Island City Council’s rigorous tender system seemed to have been disregarded, and questioned why it had been so difficult to access information on the tender process and the project in general.

Until now, eight years later, the feasibility study has yet to be completed. A local report quoted Public Works, Utilities and Flood Mitigation Committee chairman Zairil Khir Johari as saying any decision to replace the RM6.3 billion undersea tunnel with an elevated bridge will be made only after the release of the feasibility report on the tunnel.

So, when will the feasibility report be concluded? There are other controversies over this report. Reports have said the study costs RM305 million and is to be paid for by a land exchange with CZB. The Malaysian Anti-Corruption Commission investigated this, but cleared the consortium of any wrongdoing in April 2019.

The study has been inexplicably delayed a number of times. About a year ago, it was reported that the tunnel project was on hold until the completion of the feasibility study. Apparently, it still has not been completed.

Considering all the problems the tunnel project has faced, and the continuing outcry from the public, it is best for the project to be cancelled. There are just too many unresolved issues to be settled.

There are also serious issues over the payment for the feasibility report of RM305 million, an inordinately high amount. According to a report, Penang MCA chief Datuk Tan Teik Cheng said the state government used a 1.5ha plot of land to exchange for a RM305 million feasibility study and detailed design report on the undersea tunnel and three highways.

“It has been eight years since the feasibility study and detailed design report was commissioned, and until today, the state government has not even seen it. And now, we are told that an elevated bridge may be the third link,” he said over the weekend.

It may not be a simple matter to cancel the tunnel project, though. It depends on the kind of agreements signed. The main original partners to the contract, Zenith and BUCG, are no longer there. ECK seems to be in the driver’s seat. Can the agreements be cancelled? And, what costs would this incur?

Would it really be the right thing to proceed with the contracts, especially since they were rather hastily made and involve rather questionable decisions? Even at this late stage, it may well be better to cancel rather than be saddled with an expensive project that is really not needed.

The question is, how did the state government, controlled by DAP, which has criticised the previous Umno/Barisan Nasional government over and over again for overspending, allow itself to be burdened with this albatross around its neck? And, how will the state government get rid of it?

Penang’s future desperately hinges on the right decisions being made over this project and the humongous RM46 billion PTMP. – The Vibes, September 28, 2021

P. Gunasegaram wonders if there are enforceable SOPs for the award of mega projects. He is chief executive of research and advocacy group Sekhar Institute and senior editorial consultant of The Vibes