KUALA LUMPUR (Sept 14): Vertice Bhd has lost a RM339.86 million sub-contract to construct the mainline and other associated works of the proposed Sungai Besi-Ulu Kelang Elevated Highway (SUKE) project as the main contractor for the project was terminated.
San Mutual Majujaya Sdn Bhd (SMM), the subcontractor of the project which had awarded the contract to Vertice's wholly-owned construction unit Vertice Construction Sdn Bhd (VCSB), had seen its appointment withdrawn by Chengaljati Sdn Bhd, itself a contractor for Turnpike Synergy Sdn Bhd, Vertice said in a filing with Bursa Malaysia today.
“As Chengaljati had exhausted the effort to revive its appointment as the contractor for the project, it withdrew the appointment of SMM with immediate effect. Following (this), it has been agreed that VCSB’s appointment under the letter of award will be mutually withdrawn with immediate effect and VCSB to be compensated accordingly,” the group added.
The costs and expenses incurred so far for the project are approximately less than RM1.5 million and VCSB has agreed with SMM that it should be entitled to submit the relevant claims for all outstanding amounts.
“This includes but is not limited to all such costs incurred for the purpose of closing the project’s accounts,” Vertice said.
Upon VCSB’s receipt of these claims with SMM making full payment of the same, the letter of award will be null and void and neither parties will be entitled to make any further claim, demand, action, suit or proceeding due to the withdrawal of the award, the group added.
“In view that the group has several projects currently under bid, other concurrent on-going projects and is confident of securing additional new projects in the foreseeable future, this withdrawal is not expected to materially affect the earnings and net assets of the group,” Vertice said.
Shares in Vertice closed up 0.5 sen or 0.56% at 89 sen today, bringing a market capitalisation of RM166.35 million.