Guan Eng corruption trial: Rival firm says BUCG had inside line on Penang undersea tunnel project tender

KUALA LUMPUR, Sept 23 — Though marginal, Beijing Urban Construction Group (BUCG) still enjoyed an advantage over competitors when bidding for the four Penang mega projects in 2011, the Sessions Court heard today.

A witness said this was because BUCG was allowed to be present in at least three meetings with the state government discussing the scope of the project even before it was offered through an open tender. 

WCT Bhd general manager Ooi Tok Thian, when testifying as the prosecution’s seventh witness in Lim Guan Eng’s corruption trial, said despite information within these meetings being general and not including project specifications, BUCG’s involvement itself could be deemed as having the upper hand considering how they later tendered the winning proposals for the project. 

Ooi had agreed during examination in chief under Deputy Public Prosecutor Francine Cheryl Rajendram that BUCG sitting in these meetings allowed them early access to the state government’s intentions for the project, the intended scope and magnitude, and the proposed project site. 

He asserted that according to the minutes of three Penang state government meetings, which BUCG were part of, discussions included measures needed to ensure the project would be successful, for feasibility studies to be carried out and to appoint an independent consultant to decide on the most appropriate design for the mega project. 

Francine: Based on what you read, is the involvement of BUCG in these meetings and preparation of documents concerning the request for proposal (RFP) with the state government an added advantage to them?

Ooi: Yes 

Francine: Can you please explain why. 

Ooi: Because of the first-hand information that they would get, and in addition, they are working on it before the RFP was issued and before they called the public for participation. 

BUCG is one half of the Consortium Zenith BUCG joint venture that was subsequently awarded the RM6.341 billion project to build three roads and the undersea tunnel in Penang.

Lim has been accused of seeking and accepting bribes from Consortium Zenith BUCG’s managing director Datuk Zarul Ahmad Mohd Zulkifli.

Ooi explained WCT Bhd were one half of the WCT-Daewoo joint venture formed to submit proposals for the mega projects that are the subject matter of this trial, where Ooi functioned as the tendering process team-leader and the contact point between the two companies. 

WCT-Daewoo submitted a proposal for three out of the four mega projects and was eventually given a score of 59 out of a maximum of 100 points, with the winning proposal from the Zenith Consortium BUCG joint venture scoring 93 out of 100. 

China State Construction Engineering Corporation Ltd & VST Cemerlang Sdn Bhd who were ranked second obtained a score of 77 out of 100. 

However, later during cross-examination under defence counsel Gobind Singh Deo, Ooi conceded that these meetings attended by BUCG, going by the recorded minutes, did not go into details into project specifics. 

Despite the repeated bombardment of questions by Gobind towards Ooi, to the point even that judge Azura Alwi had to interject to ask Gobind to slow down, the WCT employee maintained that there was some form of upper hand enjoyed by the Chinese developers. 

He agreed, however, that topics discussed as recorded within the meeting minutes were on general topics about the mega project, and did not go into the actual specifications of the project.

Gobind: Your evidence that, yes, they (BUCG) were at meetings but these meetings involved general discussions, no specifications were discussed, meaning they were not at much of an advantage, you agree?

Ooi: Not really, because they knew there is the intention by the state government to carry out this scope of work, they have the advanced information, and would know the intentions of the state government and the proposed project area. 

Gobind: But these are general discussions, something like the state government saying "this is what we are thinking about doing and hope we can do it, and BUCG, because of their previous Memorandum of Understanding (MoU), are to give their ideas on how the RFP document is shaped, agree?

Ooi: Yes. 

Gobind: These minutes don’t go into details about the specifications which are in the RFP, agree?

Ooi: Yes. 

Gobind: Looking at those documents and information on it alone, could you build the roads and tunnel just from these documents?

Ooi: No   

Gobind then suggested to Ooi that given his previous answer, BUCG could not have had a significant advantage in the tendering process, given their involvement in only three meetings, all of which could be seen as them honouring their existing MoU with the state administrators, to which the witness disagreed. 

Gobind: If there were no details given, then your analysis that there was an advantage falls to the ground, standing on these documents along?

Ooi: There were still discussions and input from the state government   

Gobind: But in this document, they just speak on the need to have meetings and conduct a survey. These were only discussions, and you yourself don’t know if there were actually meetings and a survey was done?

Ooi: Yes. 

Gobind: So if all of that was not done and these meetings are just about the project scope and left at that, how do they have an advantage?

Ooi: Having discussions on the scope itself there is already an advantage.  

Gobind: Can you tell me where there are specifications that would allow you to know details to build the roads and the tunnel?

Ooi: From the location of the project you can know roughly the alignment of the project proposed tunnel. 

But Ooi also agreed that the Penang state government conducting the necessary preparations to request pre-qualification and RFP documents from interested companies strongly suggested their intention to have the project offered through an open tender as opposed to direct negotiations. 

He told the court that cases involving direct negotiations would normally see the state government approach specific persons or companies to carry out the intended works as opposed to how an RFP was issued in this case.

Gobind: So there wouldn’t be a form of a tender or RFP requested if it was a direct negotiation?

Ooi: No, because it's not an open tender. 

In this trial, Lim faces four charges, one under Section 16(a)(A) of the Malaysian Anti-Corruption Commission Act for having allegedly solicited kickbacks of 10 per cent of future profits from Zarul as a reward to help the latter’s company secure the project in March 2011, as the then CM.

He is also facing a charge under Section 23(1) of the same Act for allegedly receiving RM3.3 million in kickbacks from Zarul between January 2011 and October 2017 for allegedly helping the latter’s company secure the mega project.

The trial before judge Azura continues tomorrow.