Press Statement

by Lim Guan Eng

(Petaling Jaya, Thursday): DAP is shocked by the announcement of Works Minister Datuk Seri S. Samy Vellu that the Public Works Department (PWD) has paid RM 257.4 million compensation to Gerbang Perdana Sdn Bhd, the contractor for the Malaysian side of the half-bridge to replace the Johor Causeway which was aborted by the Government on April 12 last year. The RM257.4 million compensation to Gerbang Perdana Sdn Bhd has caused an absurd situation whereby it is cheaper to build the crooked half-bridge than to abort it, as the total cost of cancellation of RM 1,277 million far exceeds the construction cost of RM 1,113 Million. 

The original cost of the crooked half-bridge of RM 1,113 million did not include the cost of the Customs, Immigration and Quarantine (CIQ) Complex that has already been built at cost of RM 1,266 million. However the government may have to pay more than the original cost of the bridge as the cancellation costs amount to RM 1,277 million as follows:-

• RM280 million to build a permanent eight-lane overhead road connecting the new Customs, Immigration and Quarantine complex in Johor Baru and the Causeway;

• RM190 million to build other flyovers and connecting roads to the elevated highway;

• RM170 million for preliminary work done on the project;

• RM 257.4 million compensation to project contractor Gerbang Perdana Sdn Bhd; and

• Land premiums for Johor state government at RM 380 million.

It is outrageous and ridiculous that the cancellation costs amounting to RM 1,277 million is RM 164 million more than the cost of building the bridge of RM 1,113 million. Logic suggests that the government should save hundreds of millions from canceling the bridge and not lose RM 164 million.   

If the government is to pay up RM 1,277 million, then it might as well save RM 164 million by building the crooked half-bridge for RM 1,113 million! The government is very generous in granting RM 257.4 million in compensation, which is 72% of Gerbang Perdana’s total compensation claims of RM 360 million.  

DAP can not understand why the government can still pay compensation of RM 257.4 million when RM 170 million has already been paid out for preliminary works done. Obviously Gerbang Perdana would have profited from the RM 170 million for preliminary works done and to be paid RM 257.4 million compensation would be like allowing it realize its profits if the scenic half-bridge had been approved.  

Further the same Gerbang Perdana had been given another government project valued at RM 470 million for both the eight-lane flyover and connecting roads to the new RM1.2 billion Customs, Immigration and Quarantine (CIQ) complex without an open tender. Why should the contractor still be paid compensation of RM 257.4 million when it will further profit from the RM 470 million road works obtained without an open tender? 

As a responsible Minister acting in the public interests, Samy should have refused to pay a single cent of compensation to the contractor to show Samy’s commitment and sincerity against paying unfair compensation to the contractor. Let the contractor sue the government if he is not happy. Let the courts decide on what is a reasonable amount of compensation!  

For Samy to say today that it is up to the government to undertake any government project any time at its complete discretion is the height of arrogance of power. Government projects benefiting the people should be carried out as and when needed, not only during a by-election. Or is Samy more interested in carrying out projects that would benefit the few at the expense of the people?  

Any failure to ensure that excessive compensation is not paid out to Gerbang Perdana would not only question Samy’s commitment to saving public funds but more importantly question the integrity of Abdullah in fighting corruption and abuse of power. Logically speaking, based on a financial perspective, it would be cheaper to build it than to abort it.   How can Abdullah justify that cancelling the half-bridge project is more expensive than building it?