KUALA LUMPUR — July 9, 2019: The light rail transit line 3 (LRT 3) contract worth RM1.12 billion earlier awarded to IJM Corporation Berhad has been terminated due to a remodelling of the project.
The company revealed today that its wholly-owned subsidaiary IJM Construction Sdn. Bhd. (IJMC) had received the notice of termination for the underground works from MRCB George Kent Sdn. Bhd. (MRCB-GK) yesterday.
“The termination was due to the project being remodeled from a project delivery partnership to a fixed price contract model pursuant to the direction of the government. The new contractual framework has resulted in MRCB-GK’s employment as the project delivery partner (PDP) under the PDP agreement with Prasarana Malaysia Berhad being terminated.
“Following the termination, and pursuant to the conditions of contract, MRCB-GK as the PDP, has issued the notice to IJMC,” IJM said in a filing with Bursa Malaysia.
IJMC accepted the letter of acceptance for the project with an underground package from Bandar Utama to Johan Setia for RM1.12 billion, inclusive of six per cent of the then Goods and Services Tax, on March 13 last year.
The project, involving the design and construction of an underground tunnel, stations, ancillary buildings and other associated works, was initially scheduled for completion in 31 months.
“Preliminary works had commenced before the project was suspended in June 2018. IJMC is currently consulting its advisers and will seek appropriate legal redress under the contract.
“Apart from the potential earnings from the project, the termination will not have any significant effect on the financial position of the group,” said IJM. — Bernama