RM20b figure a figment of Wee’s wild imagination

MCA deputy president and Minister in the Prime Minister’s Department Wee Kia Soong has come out with a statement saying that Penang people might stand to lose RM20 billion if the Penang undersea tunnel project gets underway.

To what extent is this true? On what basis that did Wee arrive at this figure? Was this figure represented as an objective analysis of the entire project that was signed by the Penang state government in 2013?

On closer examination, it would reveal that the figure arrived by Wee is nothing but the continuation of his earlier lies, distortions and half-truths about the facts surrounding the Penang tunnel project.

As I have remarked earlier, Wee in coming out with these preposterous analyses about the tunnel project might be unwittingly doing the dirty work of Umno that is bent on getting rid of the Pakatan Harapan government in Penang.

Of course, Wee has his own agenda – one of making MCA relevant to the Chinese once again. This is now truer that taking on the Penang state government headed by the DAP.

If MCA can negate the achievements of the Penang DAP-led government then there is a possibility that it would fare better in other states with a lesser Chinese majority.

The most prolific critic of the Penang tunnel project (this goes without saying) is none other than Wee. For reasons best known to himself and to his close associates in MCA, he has tirelessly fought against the project that was embarked on by the Penang state government.

To date, I am not sure whether he has unearthed any significant wrongdoing about the project other than saying that the Penang state government has not been transparent about the project from the start.

Although he hopped from one matter to another for some time, he finally zeroed to say that the Penang state government should not have awarded the project to Zenith Consortium on the grounds of its financial incapability and secondly he wanted to know how much the SPV company has paid the China Railway Company Corporation (CRCC) for services rendered.

Wee’s latest salvo against the Penang state government is an accusation that it might have inadvertently paid a huge sum of more than RM20 billion for the tunnel project.

How he arrived at this exorbitant figure is perhaps left to his rather fertile wild imagination. Unless and until he clearly spells out how he worked out his maths to arrive at this figure, then I can only dismiss his imaginary figure on the basis of what we know about the project and how much the state government would have spent for the completion of the project.

His figure of the special purpose vehicle earning RM2 billion on toll collection for 30 years needs to be scrutinised by financial experts. Unlike other federal government projects where funds are available, the tunnel project in Penang will be paid by a land swap deal that is locked in at the value of RM1300psf, even though the current value is only around RM475psf.

Since the construction of the tunnel will cost the state government RM3.6 billion at the time of the signing of the agreement, when the project commences in 2023 it will be worth RM5.8 billion based on a mere five percent of yearly appreciation.

This will mean that the Penang people would have lost out RM2.2 billion in the sheer appreciation of the land value. Again, how on earth he can say that the Penang government would have forked out RM9 billion in state funds to build the necessary infrastructure to support the private initiative of the SPV?

Perhaps he could give supporting evidence on how he arrived at this figure rather than simply speculating about the RM9 billion figure he has come out with.

Wild allegation

So how does Wee arrive at the figure of RM20.54 billion as the total cost to the people in Penang? In arriving at this figure, he adds the cost of RM6.34 billion cost for the three roads and tunnel project, the sum of RM3 billion that would go to the concessionaire of the toll, RM2.2 billion in the appreciation of the land value, and RM9 billion that the state government would spend on infrastructure works to support the project undertaken by Zenith Consortium.

Unless there is a grant from the federal government, the Penang state government has no choice but to go for a land swap to pay for the road and tunnel project. This fact is well known to the public and Wee himself.

He cannot pretend to be surprised by the manner of payment for the project involving three paired roads and the tunnel project. So even if the land price were locked to save costs, surely the market price of the land would have considerably appreciated in 10 years time. What is the big deal about this?

How can Wee say that the appreciation of land value is a loss to the people of Penang? Even if the land was not meant as a swap for the tunnel project, given the scarcity of land of Penang, the appreciation of the value of land in Penang is something to be expected.

So RM3.6 billion worth of land in 2013 will be worth RM5.8 billion in 2023 is mere speculation. Yes, even if the land is worth much more and not on the scale mentioned by Wee, so what? How could he say that this is the fault of the Penang state government?

He says that Penang government would be forking out RM9 million for both the projects on the mainland and the island is a mere assertion and at best a wild one.

He is also making a wild allegation as though there is prior understanding that there was something about the relationship between the Penang state government and Zenith Consortium in ensuring the latter will be bankrolling the latter in terms of infrastructure works.

This is a wild and preposterous allegation by Wee. It is not that there would not be any infrastructure works related to the two projects, but he cannot say that such infrastructure works will be a burden to the people of Penang. If roads and bridges are built in Penang in the future, is this burden to the people in this state?

The RM20 billion figure worked out by Wee is nothing more than a fictitious figure to paint a terrible picture of the Penang state government under the coalition of Harapan.

For that matter, any infrastructure work undertaken by either the federal or state government can be easily construed as a burden on taxpayers. If this is the case, can we halt the projects as unnecessary?

So if the Penang state government spends money or land swaps for infrastructure works then are they are a burden to the people? However, if the federal government spends, then it is necessary? This is the convoluted logic of a minister in the federal cabinet.

Wee in his one-sided calculations aimed at the belittling the Penang state government failed to factor in the interests costs that would accrue to the SPV in borrowing from the banks, interest payments and others.

If Wee really cares to understand the full spectrum of the project that involves both the roads and the tunnel projects in Penang, perhaps he could go through his boss Liow Tiong Lai to approach the Penang government for some basic facts about the project.

Once again, Wee in his uncontrollable anger at the Penang state government failed to objectively understand some basic facts about the project. Alternatively, he sought to manipulate some little-known facts to his political advantage to accuse the Penang state government.

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