Press Conference Statement 
by DAP Penang chairman and Member of Parliament for Tanjung Chow Kon Yeow 
at the Penang DAP Headquarters 
on Friday, 21 June 2002 at 11.30am

DAP alleges hanky-panky in the award of the RM1.02 billion Penang Outer Ring Road project, calls for transparency and investigation

On Tuesday, 18 June 2002, I have received a written reply from Works Minister Datuk Seri S. Samy Vellu in respond to my question in Parliament on whether the Government would review the privatization of the PORR project.

The Minister emphasized that the concessionaire be given special financial incentives to ensure that toll imposed on the PORR would not be too high.

He explained that due to the high construction cost, toll charges are expected to be high.

However, he added that to ensure that toll charges are kept low, the Penang State Government had agreed to allow the concessionaire to reclaim 500 acres land along the northern coastline; 139 acres off Gurney Drive, 220 acres in the Middle-Bank area and another 150 acres off Tanjung Bunga,

Datuk Seri Samy Vellu also said that the concessionaire would be responsible for the cost of reclaiming the 500 acres of land. As a further move to alleviate the financial burden of the concessionaire, the State Government had agreed to offer to grant them six pieces of State lands for development purposes.

According to the Minister, this is to help cross-subsidize part of the highway construction cost and subsequently reduce the toll rate.

The DAP finds the financial module used for the PORR project unacceptable as it is not a fair deal.

We want to dispute the government’s claim that the concessionaire has to bear a very high construction cost for the project.

According to project document made public, the RM1.02 billion project comprises RM 150 million for compensation for land acquisition, which would be allocated by the Federal Government. The construction cost is said to be around RM871 million for the original alignment.

However, we have shown earlier that the actual construction cost should be lower than RM871 million as the new alignment would involve less works since it has been shortened by 4 kilometers and shelving the construction of four tunnels.

Engineers are of the view that the project cost could be reduced by another RM200 million because of the reduction in the amount of works, thus the actual cost would be around RM671 million.

Similarly, we want to show that the financial packages would promise a hefty profit to the concessionaire making it unnecessary to impose toll.

The 500 acres of land bank reclaimed from Persiaran Gurney, Middle-Banks and Tanjung Bunga is estimated to worth RM2.5 billion.

The concessionaire is also expected to reap another RM 350 million from development of the six pieces of State land.

If this is so, why is the Government still insisting of using the proposed financial module when in actual fact the concessionaire should be able to build the road toll-free.

We demand full transparency in the award of the PORR project and if necessary the Anti Corruption Agency would be asked to conduct a thorough investigation as to why the project has been overpriced.