Saturday 16 August 2014

Mysteries in Penang Traffic Dispersal project

In an announcement dated 15 August 2014, Astral Supreme clarified that the JV agreement for feasibility studies and design for the constructions of various roads and an undersea tunnel in Penang was terminated as Astral Supreme was unable to find consultants who could undertake the project within the budget and the funding requirements.

According to Astral Supreme's website, the group is principally engaged in the business of manufacturing, assembly and export of electronic products and components. There are issues with the company. Among others, the company has failed to submit its annual audited accounts for 2013 within the stipulated timeline. It has also received qualification in the auditors' report on its audited financial statements for 2013.

So why get Astral Supreme to involve in the feasibility study when i) the company is troubled and doesn't seem to be in the related industry? Why the client go through Astral Supreme instead of engaging engineering consultant directly to do the feasibility study?

The JV agreement for the feasibility study was signed in August 2013. The JV agreement was terminated in July 2014 with reason of failure of Astral Supreme to find consultants to do the job. If that is the case, how could Dato Zarul commented the feasibility study was ahead of time and was expected to be completed by April 2014 (source)??!!

Besides, according to Astral Supreme's clarification, the JV is expected to make RM60m of profit from the feasibility study that is expected to cost RM210m. What a whooping 28.6% profit margin for a feasibility study!!

Secondly, why was Consortium Zenith BUCG Sdn Bhd, an RM2 company, awarded the traffic dispersal project, when i) Zenith Construction Sdn Bhd has no related track record as the company was only registered in July 2012 ii) its Chairman, Datuk Zarul, was neither a director nor a shareholder of the company iii) how could Zenith secured the project award when they had not even registered the company when the tender for the project was closed in June 2012? (source: malaysia-today)

Another little known company is involved in the project. As partial payment for works to be carried out by Consortium Zenith for the major road project and the undersea tunnel project, 9 acres of land on Seri Tanjung Pinang 1 was granted to the consortium. The consortium has entered into a JV with Ewein Bhd to developed the land. Ewein is a player in the precision sheet metal fabrication industry. Why JV with Ewein and not a more reputable developer such as IJM Land and Ecoworld? I am sure for the same piece of land, a reputable developer would be able to generate much higher GDV compared to a small listed company without proven track record.

For a mega project with an estimated value of more than RM6b, I think the Penang State Government which has pledged to run its administration with competency, accountability and transparency (CAT) policy, owes an explanation to the public why Zenith Construction Sdn Bhd could get involved in the project? And shouldn't Penang government has some say and control over the appointment of consultant for the feasibility study and maybe also the appointment of the developer for land given to the consortium as payment.


  1. Very well said !

  2. That "CAT" thing from Lim Guan Eng is nothing but a sandiwara

    Just like his promise to the Penang Lang for the "Local Council Election" --- you know, I know, everybody knows, it's a promise that Lim Guan Eng knows very well it's a lie

    When they push that nepotism candidate into the Bukit Gelugor district the people of Penang already see the real face of DAP --- they are no better than their opponents from bn

  3. Penang open tender is a bluff. In reality all big projects go to chronies. They are all the same.