Penang undersea tunnel work sees slight delay

Property News/ 12 January 2016 Leave a comment

inset_fd_110116_theedgemarketsConsortium Zenith BUCG Sdn Bhd (CZBUCG), the main contractor for the RM6.3 billion undersea tunnel project in Penang, will commence the construction on June 15, slightly later than its original schedule.

The construction of the mega project is expected to begin in the first quarter of this year.

CZBUCG chairman Datuk Zarul Ahmad Mohd Zulkifli said the consortium will first begin construction of the three highways, which form part of the project, before embarking on building the 7.2km undersea tunnel linking Penang island to the mainland.

The three road projects are the paired-road from Jalan Tanjung Bungah to Teluk Bahang, the Air Itam to Tun Dr Lim Chong Eu Expressway bypass and the bypass from Gurney Drive to Tun Dr Lim Chong Eu Expressway, which have a combined length of 21.2km.

Zarul said the consortium is currently waiting for the Penang state government to conduct an independent environmental assessment of the three road packages.

“What is pending now is that the state government is going to appoint an independent environmental consultant to look at it (the road projects), and to get approval from the Department of Environment (DoE) for the three highways,” he told The Edge Financial Daily in an interview last week.

“It will not take long because the DoE has already given us the go-ahead, but we have to get the state’s independent environmental consultant’s assessment, and submit with the preliminary environmental impact assessment (EIA), to get a formal approval,” Zarul explained.

He said the environmental assessment of the three highways can be done relatively faster than for the undersea tunnel, which would take up to 18 months.

“Unlike the undersea tunnel, where there are more environmental concerns, the DoE has already given us a letter for the three highways, which stated that we only need a preliminary-EIA to start construction,” Zarul added.

As the highways would take about six years to complete, Zarul estimates that CZBUCG would begin the EIA application for the undersea tunnel by 2017 or 2018.

“We probably would start (construction on) the undersea tunnel by 2021.

“We have to complete the three highways first. Otherwise, traffic volume from the tunnel would have no channel to disperse,” he said, adding that construction of the tunnel would take up to two years to complete.

CZBUCG was awarded the RM6.3 billion integrated road transport project on Oct 6, 2013 by the Penang government. In return for building the infrastructure, the state government will compensate CZBUCG with 110 acres of freehold reclaimed land at Tanjung Pinang.

After the completion of the three highways, Zarul said CZBUCG will claim about 50 acres of the said land from the state government.

“We will claim the land from the state government every time we achieve a certain milestone in the construction, which commensurates with the value of the land,” he said.

The consortium has appointed China Railway Construction Corp Ltd (CRCC) as its engineering, procurement, and construction contractor for the project, on favourable terms.

Under the partnership with CRCC, Zarul said the Chinese company will only get paid after the land parcels claimed from the state government are monetised.

CZBUCG has formed two joint ventures (JVs) with public-listed precision sheet metal manufacturer-cum-property developer Ewein Bhd.

After securing the land parcels from the state government, CZBUCG will dispose of them to these JVs (it owns 40% stakes in both entities) to monetise the properties and pay the construction fees to CRCC.

Moving forward, Zarul said CZBUCG may consider lowering its stake in the JVs to 20% each, in order to reduce the consortium’s capital expenditure.

“When we start construction, we need more cash, so probably we would reduce our stake to 20%,” he said.

So far, Zarul said the project has incurred expenditure of about RM160 million.

A check with the Companies Commission of Malaysia showed that the shareholders’ structure in CZBUCG has been updated to 98.10% owned by Zenith Construction Sdn Bhd, with the remaining held by Juteras Sdn Bhd (1.89%) and Beijing Urban Construction Group Co Ltd (0.01%).

Source: TheEdgeProperty.com.my

  1. Sam
    January 12th, 2016 at 06:49 | #1

    “So far, Zarul said the project has incurred expenditure of about RM160 million.”

    RM160million ??? Where got ? When nothing is seemed to be works at all after so long !

  2. James
    January 12th, 2016 at 09:43 | #2

    Why took so long? This should be finish 2 yr ago if the purpose is to ease traffic from the 1st bridge as most ppl go to prai

    The 2nd penang bridge which not many people cross also finish year ago , i wonder why 2nd bridge build so fast while whole island people are stuck in traffic jam and still using the 1st bridge , the 2nd bridge is like a piece of art instead of function wise for the past 2 year

    The fact is all people are not staying at batu kawan area and the development there take year , such a bad planning , 2nd bridge is not too late to build when batu kawan developed and priority should be put 1st on highway as well as 2nd link to prai , not batu kawan

    Planning for future is good, but not planning for now is idiot

  3. peter
    January 12th, 2016 at 09:57 | #3

    Your comment really hits the nail on the head, why on earth was the 2nd bridge given priority, when the Gurney Drive tunnel was even put forward by Samy Velu years ago, as I read somewhere, anyone can see even years ago that this tunnel is exactly what Penang needs. Probebly the 2nd bridge was more about a few important people getting rich rather then the welfare of the Penang people.

  4. James
    January 12th, 2016 at 10:30 | #4

    Penang need access to prai, bm area because that is the main place people are going and back from , if the 2nd bridge is place at prai even, today car dont need to drive inch by inch on the 1st bridge , moreover traffic jam at the beginning start up point of the 1st bridge is what cause the jam at bayan lepas area starting from bayan point / krystal point area…..there you go for year people stuck and a new piece of “art” just stood there, want compete guinness book of record of the longest bridge maybe is more important than a 7.2 km tunnel or a shorter bridge to prai

  5. neutral
    January 12th, 2016 at 10:59 | #5

    Haha….let’s not get political and start the finger pointing. Firstly, I think the people are tired of hearing the blame on previous administration. If we keep doing that, we can’t move forward.

    But seriously, the people don’t see anything being done yet for the tunnel, but the “rich” is already making money from the land given as remuneration for doing nothing? MACC might want to take a look at it?

  6. peter
    January 12th, 2016 at 15:05 | #6

    What is mind boggling is how some people and groups are actually questioning the need for the tunnel, while having what seems to be “selective blindness” concerning the 2nd bridge, why don’t these groups do some investigation about why on earth the 2nd bridge was approved? Was there a study about whether it was needed? And why it was located where it is now? Instead some people point to the 2nd bridge and say we don’t need the tunnel, Hello, do you know how ridiculously inconvienient the 2nd bridge is in so many aspects? Not only is it almost funny how long it is, you have to drive what seems like halfway to Ipoh to use it.

  7. Danny
    January 12th, 2016 at 15:49 | #7

    I guess those questioning the need of this tunnel is either menteri where police open way for them or maybe some outsider or local that never use the bridge before

    They live next to their office or they always travel within penang island only, those kaki buta memang lol

    Penang seriously need this tunnel from earlier but now it seem is less priority , what a pity

  8. Lee
    January 12th, 2016 at 15:53 | #8

    Haha 2nd bridge not more than 800 car pass per day

    1st bridge 1 hr 1k+ car pass

    Just esrimate based on staying here observation lol

  9. Andy
    January 12th, 2016 at 16:55 | #9

    I am not surprised when the tunnel opens in 2023,the traffic flow volumes will match the 2nd bridge…2nd bridge caters for a segment of intended motorist while the undersea tunnel serves well the residence in Northern Penang and Butterworth area.

  10. Sam
    January 12th, 2016 at 20:26 | #10

    That project has elapsed over a long period of time. The so-called agreement was in fact, signed in 2013 !
    An agreement with no time limit of implement ?

  11. Jack
    January 12th, 2016 at 23:14 | #11

    Northern penang is the most jam around komtar and jetty , the tunnel should be here by now

  12. Sky
    January 13th, 2016 at 11:35 | #12

    Lets support the construction of the tunnel and hope it gets completed as soon as possible. Sometimes you got no choice but to sacrifice a bit for development. What to do. This is the world right now. Those people can protest here but can you stop the whole world?

  13. Player
    January 13th, 2016 at 15:01 | #13

    What happen? Ewein Zenith is responsible for this project…If this cannot be delivered on time then how can they deliver future projects? City of Dreams 1 and 2.

  14. Player
    January 13th, 2016 at 15:40 | #14

    Likewise The Margarine in Tsunami Bay will not be delivered on time. Many
    had their bookings cancelled.

  15. TheUnderStory
    January 13th, 2016 at 17:35 | #15

    There’s a hidden story behind the 2nd bridge. It was the fruit of discussion between the government (back then DAP not yet win Penang) and the MNCs at FTZ area.

    1. MNCs have limited time to use the 1st bridge when transporting goods
    2. Expansion opportunity
    3. New source of labour/manpower from SPS / North Perak

    The decision for the 2nd bridge is more economic & political than serving the wants of the population. But then again, if the MNCs’ request were not met, there might be less job opportunity and therefore more unemployment. It’s good for Penang because it provides jobs indirectly but is under utilised hence many is seeing as a waste. Building more roads will just be a temporary solution as they may be able to build a road to ease the stress at Greenlane and other roads but the it will just bottleneck at Gurney area where the under tunnel will connect.

  16. peter
    January 13th, 2016 at 19:38 | #16

    Thank you for this info, There is a Gurney to LCY Bypass planned in the photo marked in a red line to ease the bottleneck at Gurney area, in fact here is a direct quote from above,

    “We probably would start (construction on) the undersea tunnel by 2021.

    “We have to complete the three highways first. Otherwise, traffic volume from the tunnel would have no channel to disperse,” he said, adding that construction of the tunnel would take up to two years to complete.”

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