Does the Penang tunnel contract include compensation if cancelled?

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Penang Undersea Tunnel Project Cancellation and Compensation Clause

The Penang undersea tunnel project contract does not contain a specific clause for termination compensation. However, the project developer, Consortium Zenith BUCG Sdn Bhd, could still seek claims for work already undertaken if the project were to be cancelled. This assertion was made by state Barisan Nasional chairman Teng Chang Yeow, who questioned the necessity of compensation for a project that has not yet commenced construction.
Absence of a Termination Compensation Clause

State Barisan Nasional chairman Teng Chang Yeow stated that the RM6.3 billion Penang undersea tunnel project contract lacks any provisions for termination compensation. This means that if the project were to be cancelled, there is no pre-defined financial penalty stipulated in the contract for the state to pay the developer. Teng Chang Yeow raised this point in response to claims that the project's cancellation would incur compensation costs.
Potential Claims for Work Done

Despite the absence of a termination compensation clause, Consortium Zenith BUCG Sdn Bhd chairman Datuk Zarul Ahmad Mohd Zulkifli indicated in 2016 that the company could still make claims for any work performed. This implies that if the project is terminated, the developer might be able to seek reimbursement for costs incurred on preliminary activities or studies, even without a formal compensation clause. This position suggests a potential avenue for financial recourse for the developer.
Questioning Compensation for Unstarted Work

Teng Chang Yeow questioned the rationale behind paying compensation for the cancellation of the undersea tunnel project, particularly as it has not yet begun. He highlighted that no construction work has been undertaken by the developer. Therefore, he argued, there would be no basis for the state to pay compensation if Barisan Nasional were to proceed with its pledge to cancel the project upon gaining power in Penang.

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Does the Penang tunnel contract include compensation if cancelled?

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