GEORGE TOWN, April 18 — Penang Barisan Nasional (BN) chairman Teng Chang Yeow can pay compensation to the undersea tunnel contractor if the state project is cancelled, Lim Guan Eng suggested today.

The DAP secretary-general stressed that the contract for the RM6.3 billion project includes a compensation clause and is legally binding, contrary to BN’s assertions.

He also said that the state would have to pay compensation if the project had to be cancelled due to alleged sabotage by BN.

"Since Teng said there was no need to pay compensation if the project is cancelled, then if we do cancel and had to pay compensation, he can pay it for the state,” the caretaker Penang chief minister said in a press conference in his office here.

Lim said there were no contracts that did not have a compensation clause if they were cancelled.

"I don’t know where they source such information from but it is obvious, we signed a contract, so if we cancel the project, obviously we have to compensate the contractor for breaching the contract,” he added, in response to Teng’s pledge yesterday that BN will cancel the undersea tunnel and paired roads project if it regains Penang in GE14.

The Gerakan leader insisted that no compensation would be involved as the contract says the contractor will be reimbursed the construction costs incurred.

Teng added that the construction had not started so there were no costs incurred, therefore no compensation would have to be paid.

The DAP-led state administration had proposed the undersea tunnel and three paired roads connecting the island to the mainland to alleviate traffic congestion.

Lim, whose party will be fighting to defend the state it won 10 years ago in Election 2008, criticised the state BN opposition, saying its GE14 manifesto did not offer any solutions to traffic congestion.

"We want to concentrate on moving people, not moving vehicles, by introducing bus routes and LRT but BN, they do not have any public transportation plan to alleviate the traffic congestion,” he said.