This article first appeared in The Edge Financial Daily, on March 11, 2016.

KUALA LUMPUR: Scomi Engineering Bhd, which had obtained an ex parte injunction to restrain Prasarana Malaysia Bhd from terminating a RM494 million Kuala Lumpur monorail expansion contract, said its work on the project was delayed by Prasarana’s failure to timeously certify and pay progress claims made.

In a filing with Bursa Malaysia yesterday, Scomi Engineering said to date, it has completed 83% of the project work and will complete the project within the time that it is entitled under the contract.

“As at today (yesterday), Prasarana is still in breach of contract by failing to pay sums due to Scomi Engineering,” it added.

Prasarana said on Wednesday it had issued a notice to remedy to Scomi Engineering’s wholly-owned subsidiary, Scomi Transit Projects Sdn Bhd, for its failure to comply with Stage Gate Schedule 2 of the second supplemental contract to deliver 10 sets of new four-car monorail trains, including seven sets for revenue service by Dec 31 last year.

Prasarana said Scomi Engineering not only failed to comply with the schedule on the delivery of the trains, it also failed to submit any mitigation plan to remedy the delay as requested by Prasarana on Jan 4.

Under the notice to remedy, Scomi Engineering has 60 days from March 8 to comply with the notice, failing which Prasarana would be at liberty to terminate its contract with the public transportation service provider.

In response, Scomi Engineering said it received a letter dated March 8 from Prasarana on Wednesday, which purported to be the said notice to remedy.

Scomi Engineering added that it has been advised by its solicitors that the notice to remedy was in effect an admission by Prasarana that its earlier purported notices were defective.

Under the principal contract signed between Prasarana and Scomi Engineering in 2011, Scomi Engineering was contracted to deliver 12 sets of new four-car monorail trains, construct a new depot, install a new signalling system, as well as to upgrade the Kuala Lumpur monorail stations, including the electrical and mechanical systems, for a total contract value of RM494 million.

Scomi Engineering shares were not traded yesterday. The stock last closed on Tuesday at 28 sen, with a market capitalisation of RM95.75 million.