Penang’s ‘Samy Vellu tunnel’ hits a road-block


This is what happens when you do things upside down. Zenith PMC Sdn Bhd has terminated its joint venture agreement with Astral Supreme Construction Bhd to conduct a feasibility study for the controversial tunnel after the latter failed to secure consultants to carry out the study.

In the first place why award the feasibility study to a third party which then has to find external consultants for the project? Someone was going to make some guaranteed profits here. Alas, for them, it wasn’t to be.

More importantly, an independent feasibility study for the tunnel should have been done before any award of tender. This is what happens when you do things the wrong way around.

And crucially, is the tunnel even necessary in the first place. Remember, the ‘independent’ consultants for the Penang Transport Masterplan only included the tunnel into the masterplan because that was what the state government wanted, and even then the consultants indicated it was not an immediate priority. It was something to consider for 2030.

Anyway, why do I call it the Samy Vellu tunnel? The idea for a northern link in Penang that would include a tunnel came in 2001, as declared by then Works Minister Samy Vellu. (Perhaps it failed to take off because someone was eyeing vast land banks in Batu Kawan for a southern link, which would go on to become the second Penang Bridge.)

Back then I wrote for Aliran:

In the long term, the state should be looking at more sustainable transport modes, including Light Rail Transit systems (on both the island and the mainland) with cross-channel links (high-speed passenger ferries, hovercraft, or even an LRT link). Constructing new ferries and running a vastly expanded ferry service would provide hundeds, even thousands of new jobs in Penang.

Why copy an idea from someone like Samy Vellu? Surely, we can come up with more progressive and sustainable transport solutions for Penang.

In the first place, is a road tunnel even a priority when we do not even have a cross-channel rail link?

For the record, here are the announcements made by Astral Supreme:

25 July 2014:

Reference is made to the announcement dated 15 August 2013 in respect of the Joint Venture Agreement dated 15 August 2013 (“JVA”) between Astral Supreme Construction Sdn Bhd (“ASC”), a wholly-owned subsidiary of the Company and Zenith PMC Sdn Bhd (“ZP”) to jointly manage, perform and carry out the Feasibility Studies and Detailed Design Stage of the project known as “Projek Pembinaan Jalan-jalan Utama dan Terowong di Pulau Pinang”, involving the proposed construction of various roads in Penang and an undersea tunnel between Penang Island and Seberang Perai (“the Project”).

The Board wishes to announce that ZP vide its letter dated 11 July 2014 had declined ASC’s appeal to defer the implementation of the JVA until November 2014 due to unreasonable delay which is in breach of clause 10.1 of the JVA which states that the works shall be completed within thirty (30) months from the date of JVA. Further, clause 12.4 of the JVA stipulates that time wherever mentioned in the JVA shall be of the essence. ASC failed to remedy the breach within fourteen (14) days from the date of the letter. Accordingly, the JVA was terminated and rendered null and void with immediate effect. With the termination, neither the parties shall have any further claims against each other in respect of the JVA.

Save for Mr Wong Kwai Wah who is the Executive Director of ASupreme and Non-Executive Director of ZP, none of the Directors or major shareholders of the Company or the persons connected with them, has any interest, direct or indirect in the transaction. The termination will not have any significant effect on the earnings or net assets per share of the Company for the financial year ending 31 December 2014.

15 August:

Further to our announcement dated 25 July 2014 in connection with the termination of the Joint Venture Agreement (“JVA”) between Astral Supreme Construction Sdn Bhd (“ASC”) and Zenith PMC Sdn Bhd (“ZP”), the Board of ASupreme wishes to inform that since the signing of the JVA on 15 August 2013, ASC was unable to find consultants who could undertake the project within the budget and the funding requirements. ZP has to meet the milestones set by the Penang State Government in regards to the feasibility studies and design for the project. ASC’s appeal for further delay in the commencement of the project was declined by ZP and hence the termination. With the termination of JVA, ASC shall not be able to derive contributions from the guaranteed profit under the JVA as announced on 15 August 2013.

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Ong Eu Soon
Ong Eu Soon
23 Aug 2014 12.11am

… Ong Eu Soon lodged a complaint to the police that PPS is an illegal organisation. If the Penang voluntary patrol unit (PPS) is found as illegal society, should the public prosecutor charge (its leaders) under the section 42 of the society act,1966(?) Would you consider it as a political persecution when it is Ong Eu Soon vs the state government? On the penalties on office-bearer, etc., of an unlawful society, section 42 states that any office-bearer and any person managing or assisting in the management of any unlawful society shall be guilty of an offence and shall be liable,… Read more »

Ong Eu Soon
Ong Eu Soon
23 Aug 2014 12.09am

Many many moons ago, Ong Eu Soon wrote.. Open letter to the Minister in the Prime Minister department, Paul Low Seng Kuan on the Penang undersea tunnel. Dear Sir, On Oct 6, the Penang State Government formally signed a preliminary agreement with the Consortium Zenith BUCG to carry out feasibility study and detailed design for the Penang undersea tunnel project. Consortium Zenith BUCG comprises a JV between Zenith Construction Sdn Bhd and China Railway Construction Co Ltd, together with Beijing Urban Construction Group, Sri Tinggi Sdn Bhd and Juteras Sdn Bhd. On August 16, the Consortium awarded the feasibility study… Read more »

19 Aug 2014 3.38pm

What is going to happen to the land that the state has given to the company for the feasibility study worth hundreds of millions. This is what you get when you pay them before even a single brick is laid. They take your money (the rakyat’s money) while everything else is delayed for years or is cancelled.

19 Aug 2014 4.24pm
Reply to  Kevin

You think that piece of land was REALLY given to that company meh ?

No la !

That land was “name only” given to that company …

Bursa Stock Talk
19 Aug 2014 11.10am
Aisay man
Aisay man
19 Aug 2014 9.40am

Another point to ponder: – It’s anybody’s wonder why should that project feasibility study be given to an incompetent/distress company when the giant China Railway is the master builder ?!

19 Aug 2014 4.21pm
Reply to  Aisay man

The same reason why that overpriced “convention hall” project was given to an architect that nobody ever heard of(?)

19 Aug 2014 7.22am

This proposal to build the tunnel is just another opportunity for all the Umno schmucks to enrich themselves, period. To begin with, they don’t even know what they are all talking about, they can only see what kind of opportunity there are for them to enrich themselves. Thus any ‘new ideas’ are for their own benefits and who will at the end will have to pay for all these ?

19 Aug 2014 9.23am
Reply to  charleskiwi

Whose great idea is this sea tunnel, exactly?
And whose great manipulation of politics + corporate interests for this ‘tunnel vision’ ala SingLand?
But wait a minute, isn’t it a Sg Petani arrogant fact that Penangites who opposed this grand sea tunnel vision are deemed bodoh-bodoh? The panda-pandai seemed ingenious to play the people’s sandiwara hero & the cursed sea devil all at the same timing!

Cheers Kopi-O kau kau.

19 Aug 2014 1.38am

I told you before GE13 that the tunnel is linked to the UMNO stalwart. That time you wouldn’t believe me.

19 Aug 2014 9.12am
Reply to  Whistleblower

I believed you but there are many who said we are bodoh. Like I said whether its BN or PR or the Kucing its all the same. From the outside that kucing shout and shout but inside he (allegedly) bedfellow with even his enemies.

19 Aug 2014 9.17am
Reply to  Whistleblower

Yes what is the difference between the CAT and Khalid and they want Khalid out because of Kidex, Langat and so on. Is Nasaruddin telling the truth about the CAT. The CAT then shout and sandiwara and wanted to sue but Nasaruddin said I have yet to receive his saman. Now you can see that its is all sandiwara Kajang episode and so on. Just remember Selangor 3 billion and remember September 16. That is all I can say. You fathom it out

19 Aug 2014 4.11pm
Reply to  Whistleblower

All of the are the same la..

18 Aug 2014 10.58pm

Very confusing, thought the state government has given approval to build the undersea tunnel. But without feasibility studies yet. How can this come about????

19 Aug 2014 9.31am
Reply to  rui

Majority Penangites are CAT-ed bodoh!
Worshipping of an idol can make one bodoh to the extremities.
Yet the worshipping is Sg Petani branded as pandai-pandai.

Still drinking Teh Cap Kucing with eyes closed?

Lai Chee Seng
18 Aug 2014 10.13pm

Sharifuddin Latiff

20 Aug 2014 11.57am
Reply to  Anil Netto

Sammy Valoo is one of the 1Malaysia Ikon. Wonder what does that mean?