This article first appeared in The Edge Financial Daily on August 27, 2019
KUALA LUMPUR: Barakah Offshore Petroleum Bhd is disputing a RM85.2 million claim by a client for alleged failure by Barakah’s unit, PBJV Sdn Bhd, to fulfil its contractual obligations.
Barakah stated this in its reply yesterday to the Aug 8 demand notices by the client, PRPC Utilities and Facilities Sdn Bhd.
Barakah and PBJV yesterday also issued their own notices of demand to PRPC claiming RM6.58 million for alleged failure of payment for work done.
Barakah, in a filing with Bursa Malaysia, said the notices cited a series of conducts committed by PRPC which have been the cause of serious disruptions and delays to the progress of the work under a contract known as the P14 Contract.
The notices stated that PRPC’s conduct and failures include the failure to pay about RM6.58 million within 30 days, being the sum due under a progress claim which has been duly certified by PRPC, and the subsequent failure to process PBJV’s next progress claim which has been submitted to PRPC since Oct 30, 2018 for work done.
Further, Barakah said there have been verbal variation instructions given by PRPC which have delayed the original milestones, despite the contractual procedures for variation of work which require a change order to be issued by PRPC.
Consequently, no extension of time was granted by PBJV due to PRPC’s own failure to issue the change order.
“Barakah and PBJV finally dispute the validity of a letter dated 30 March 2018 issued by PRPC which purported to discontinue all the work under the P14 Contract,” it added.
Hence, PBJV has demanded PRPC to pay the RM6.58 million and to withdraw the discontinuance letter within seven days from the date of the notice.
On Aug 13, Barakah and PBJV received legal notices from PRPC, demanding RM85.2 million from them over what the client claims to be the failure of PBJV to fulfil its contractual obligations.
Barakah shares closed unchanged at three sen yesterday with a market capitalisation of RM25.07 million.