KUALA LUMPUR: The Penang undersea tunnel project has led to significant losses for the Penang state government, with two plots of land being improperly transferred, the Sessions Court heard.
Malaysian Anti-Corruption Commission (MACC) enforcement officer Zulhilmi Ramli testified that the state government lost valuable land due to “dealings” between the project’s main contractor and private entities.
“The state was the losing party here, with Lot 702 and Lot 713 transferred inappropriately.
“The government lost two plots of land, with Consortium Zenith BUCG Sdn Bhd (CZBUCG) acquiring them under questionable circumstances.
“Without the initial dealings between Datuk Ewe, Datuk Zarul and the accused, these lands would not have been wrongfully transferred,” he said when reading out his witness statement.
Zulhilmi, who was then investigating officer of the case, was referring to Ewein Bhd founder and executive chairman, the late Datuk Ewe Swee Kheng and Consortium Zenith Construction Sdn Bhd former director, Datuk Zarul Ahmad Mohd Zulkifli.
Zarul Ahmad, who set up CZBUCG to handle the undersea tunnel project and was awarded the project, is now the lead prosecution witness in this trial.
Ewe was involved as a developer in the dealings of Lot 702, which was part of a land swap agreement related to the feasibility and detailed design studies for the Penang undersea tunnel project.
Ewe was due to be called as the 15th prosecution witness in the trial, but was found dead after a fall from a condominium on Oct 5, 2021, in Pulau Tikus, Penang.
Zulhilmi said the undersea tunnel project involved a preliminary agreement between the Penang government and CZBUCG to conduct a feasibility study valued at RM305.88mil.
He said the payment for this study was made through a controversial land swap involving Lot 702 and Lot 713 in Bandar Tanjung Pinang.
The court also heard that CZBUCG sold Lot 702 to Ewe’s company for RM133mil.
“An upfront 60% payment of RM79.8mil was made, with the 40% balance contingent on the completion of the City of Dreams development.
“It is perplexing that Ewe made early payments as far back as November 2013, even without certainty of acquiring Lot 702,” said Zulhilmi.
His testimony also revealed that despite a preliminary agreement for the undersea tunnel project’s feasibility studies, valued at RM305.88mil, these studies were never completed.
“The incomplete feasibility study reflected the project’s shortcomings, yet the lands were already transferred to CZBUCG.
“The sequence of events and financial exchanges was such that, without these early dealings, the lands would not have been unjustly transferred,” he said.
Further complicating matters, Zulhilmi said that instead of the state legal advisor, the Penang government appointed a private law firm to draft the preliminary agreement for the project.
“This deviation from usual state procedures raises questions about transparency,” he said.
He added that the documents presented from his investigation included minutes from state land committee meetings and a preliminary agreement for the project signed on October 6, 2013.
“These documents outlined plans for feasibility studies and land exchanges, yet the studies remained incomplete,” he added.
Zulhilmi also pointed to a meeting on May 10, 2011, where CZBUCG anticipated construction challenges with the undersea tunnel’s feasibility.
Despite these concerns, he said the project proceeded, leading to significant land losses for the state.
Earlier during the proceedings, the court granted former Penang chief minister Lim Guan Eng the permanent return of his passport, requiring him to report monthly to the MACC.
Lim has requested his passport back to fulfil duties as the honorary president of the China-Asean Industrial Development and Cooperation Promotion Committee (ACAPICD).
He said this role necessitates frequent travel, and his application was attached with a congratulatory letter from Prime Minister Datuk Seri Anwar Ibrahim for his appointment.
Lim is currently out on RM1mil bail with two sureties, with his passport previously held by the court.
Judge Azura Alwi granted the request, imposing the condition of monthly MACC check-ins in Penang, where Lim resides, to prevent potential witness interference.
Lim, 64, is facing an amended charge of using his position as then Penang chief minister to solicit RM3.3mil in bribes as an inducement to assist Zarul Ahmad to secure the undersea tunnel project worth RM6.34bil.
Lim allegedly committed the offence at the Penang Chief Minister’s Office, Level 28, Komtar, George Town, between January 2011 and August 2017.
In the second amended charge, Lim is accused of soliciting a 10% profit from the company as gratification to secure the project.
The offence was allegedly committed near The Gardens Hotel, Lingkaran Syed Putra, Mid Valley City, in March 2011.
Lim, who is also Bagan MP, faces two further charges of causing two plots of land worth RM208.8mil belonging to the Penang government to be disposed of to two companies linked to the project.
The trial continues on October 29.
