KUALA LUMPUR (July 9): IJM Corp Bhd says it will seek "appropriate legal redress" after being terminated as the contractor for the underground package of the Light Rail Transit Line 3 (LRT3) project.
IJM Corp said its wholly-owned unit, IJM Construction Sdn Bhd (IJMC), received the notice of termination from the LRT3 turnkey contractor, MRCB George Kent Sdn Bhd (MRCBGK), yesterday.
"IJMC is currently consulting its advisers and will seek appropriate legal redress under the contract," it added in a filing with Bursa Malaysia.
IJM Corp noted that the termination was due to the project being remodelled from a project delivery partnership (PDP) model to a fixed price contract model pursuant to the direction of the government.
"The new contractual framework has resulted in MRCBGK's employment as the PDP under the PDP agreement with Prasarana Malaysia Bhd (the employer of the project) being terminated," it added.
Noting that it had announced the letter of acceptance for the project worth RM1.12 billion on March 13 last year, IJM Corp said preliminary works had commenced before the project was suspended in June 2018.
The group said that apart from the potential earnings from the project, the termination will not have any significant effect on its financial position.
Shares of IJM Corp closed three sen or 1.25% higher at RM2.43 today, giving the group a market capitalisation of RM8.82 billion. Year to date, the stock has climbed some 51%.