Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily, on March 16, 2016.

 

KUALA LUMPUR: Prasarana Malaysia Bhd has issued three notices to Scomi Engineering Bhd (SEB) since January regarding the termination of the KL Monorail expansion contract that has granted to the latter.

In a filing to Bursa Malaysia, SEB revealed the first purported notice it received was dated Jan 4, while the second dated Feb 18.

SEB was queried by Bursa on the earlier two notices. It did not disclose the receipt of the notices.

In a reply to Bursa, SEB explained that its solicitors, Messrs Lee Hishammuddin Allen & Gledhill, had received a letter dated March 11 from Prasarana’s solicitors stating that the latter will not be relying on its two earlier purported notices to terminate the KL Monorail expansion contract.

SEB said it had been advised by its solicitors that by this conduct, Prasarana, in effect, admitted that these two notices are defective and will not be used as a basis to terminate the KL Monorail expansion contract.

Meanwhile, SEB said it will be contesting both the validity of Prasarana’s letter dated March 8, which purports to be a notice of remedy, and any attempt to terminate the contract, which was received on March 9.

Prasarana issued a press statement last Wednesday, claiming that Scomi Transit Projects Sdn Bhd, a subsidiary of SEB, failed to deliver 10 sets of new four-car monorail trains by Dec 31, 2015

Under the notice for the KL Monorail fleet expansion project, Prasarana said it gave Scomi Transit Projects 60 days from March 8 to comply with the contract terms.

If Scomi Transit Projects fails to do so, Prasarana said it would be at liberty to terminate the principal contract and supplemental agreements with Scomi Transit Projects.

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