Guan Eng corruption trial: Another witness testifies BUCG had unfair advantage in Penang undersea tunnel project tender

(MMO) – The Beijing Urban Construction Group (BUCG) had an advantage over rival companies when it tendered its proposals for the four mega projects in Penang, by virtue of its involvement in drafting the project’s details at its formative stage, the Sessions Court was told today.

Former Penang state secretary Datuk Seri Farizan Darus, when testifying as the prosecution’s ninth witness in Lim Guan Eng’s undersea tunnel corruption trial, said BUCG having knowledge of details within the draft request for proposal (RFP) documents and having attended meetings with the state government placed the company on an unequal playing field to other bidders.

Farizan said that he would have flagged BUCG’s application for the open-tender project as the chairman of the Penang Acquisition Board (LPN) if he was aware of its submission given its prior involvement, saying RFPs are usually official secrets until they are released to potential bidders.

He agreed that considering BUCG was expected to be involved at the initial stages following a Memorandum of Understanding (MoU) signed between the company and the Penang state government in March 2011, it should not have submitted bids for the project

“To my knowledge, if it was concerning the MoU and for them to help, this would have been in line with the MoU. But if BUCG involved themselves in the submissions of RFPs as well, then that is where they are not supposed to be directly involved in, it should not happen,” he said when responding to the Deputy Public Prosecutor Farah Yasmin Salleh.

Farizan, who now sits as the chief executive of the Penang Infrastructure Corporation, said BUCG’s involvement would have been fine if it had excluded itself from the tender process.

“It is not an offence if BUCG were involved in the initial discussions, but on the condition that they also do not take part in the tendering process, as it is about fairness and for all the bidders to start on an equal footing.

“But as I have stated that my understanding was BUCG were involved in the preparations of the RFP documents, and this will give an advantage to BUCG when presenting their offer because they were directly involved in the preparations.

“For other companies who tendered their submissions, they started at point zero, but BUCG did not start at the same point and were further ahead when compared to other bidding companies,” he testified.

However, when cross-examined by defence counsel Gobind Singh Deo, Farizan agreed that he was not actually privy to the draft and final versions of the RFPs that was released in 2012, or what changes BUCG was asked to make, effectively being unable to make a proper comparison.

He also agreed with Gobind that the last meeting he attended with BUCG representatives present was in May 2011, and how the final version of the RFP was only released to potential bidders more than a year later July 2012.

Gobind: In this situation, your position that in this case, they (BUCG) had an unfair advantage is baseless because you do not know what they suggested and how much of it was in the final RFP that was issued a year later?

Farizan: I don’t agree because I am confident if it is not 100 per cent (similar to the draft), it would be at least 75 per cent or even 90 per cent of the earlier content, even though I did not see it.

Gobind: You were there for the meetings (in that one year between the draft and final RFPs), the state executive councillors meeting, and all this time you saw BUCG’s name there and you never objected. Why did you keep quiet, and today say there was a conflict of interest and that you knew nothing?

Farizan: Their involvement was as far as the MoU required, which was involving a tunnel. To me BUCG is there for their input and not on a whole that would see them go on to make the RFP document, and, if there are amendments required it should have been done by the secretariat and not BUCG. Their involvement was at the early stages following the MoU, but for them to do the whole RFP, it’s unacceptable unless they are not involved in the final project.

However, Farizan then asserted that he was unaware of the extent of BUCG’s initial involvement back in 2011, and in retrospect, said he would have barred them from being considered if he knew.

Gobind: If at all there was a conflict you would have stopped it (the tendering process), at that stage, being the most senior govt official?

Farizan: Yes, true, I would have stopped it.

Gobind: So, you didn’t stop it because you saw there was no conflict?

Farizan: Yes

Then during reexamination, Farizan continued to assert that BUCG would have enjoyed an upper hand, saying the final RFP did not differ much from what was discussed initially.

“I agree I didn’t see the documents (draft RFP) referred to in the July 11, 2011, meeting which said the draft by BUCG needs some amendments.

“And, even though it was issued to potential bidders one year later, I am of the opinion that there were not many changes made because the actual project did not change much from the aspect of it still requiring a tunnel and three major roads, and without changes to the alignment or overall scope of the project,” he said.

Previously, BUCG’s rival firm and fellow bidder WCT Bhd general manager Ooi Tok Thian had also testified that the Chinese company enjoyed an unfair advantage by virtue of its earlier involvement with the state government.

Muhammad Azrai Mohamad Zaini, the former assistant director of the Penang State Economic Planning Unit, had also testified that BUCG should have been excluded from official state government meetings, with the company’s presence giving it an upper hand by being privy to pre-released details.

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 Alwi continues tomorrow.