Scomi gets RM122m KL Monorail project

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KUALA LUMPUR (June 24): Scomi Group Bhd said today Scomi Transit Projects Sdn Bhd (STP) and Prasarana Malaysia Bhd (PMB) had signed an agreement involving the design, manufacture, completion and delivery of seven four-car vehicles for the KL Monorail for RM122 million on Friday (June 21).

In a statement to Bursa Malaysia today, Scomi Group said the completion agreement is conditional upon issuance of an acceptance certificate by PMB after the expiry of a monitoring period following completion of remedial works to put five four-car monorail trains into revenue service.

"The works (for the seven four-car vehicles) are to be completed within 18 months from the issuance of a notice to proceed by PMB. STP shall provide PMB with a design guarantee bond and endemic defects bond, in the form of on-demand bank guarantees each for 2.5% of the completion agreement sum to cover the period of five years commencing from the issue of the system acceptance certificate (as defined in the contracts).

"PMB shall have the right to step in and perform the works under the completion agreement in the event of default by STP. PMB may retain 2.5% of any payment due to STP under the completion agreement. STP shall provide PMB with a parent company guarantee issued by Scomi Group Bhd to guarantee the due performance by STP of its obligations under the completion agreement and indemnify PMB from any losses that it may suffer up to a maximum liability of 5% of the completion agreement sum," Scomi Group said.

The group said STP will procure and supply components, services and materials required under the completion agreement.

Scomi Group said the cost of the components, services and materials will be paid directly to the vendors by PMB.

"The completion agreement will not have any material impact on the earnings per share and net assets per share of the company (Scomi Group). There is no effect on the gearing of the company as no bank borrowings is expected to be arranged for the completion agreement," Scomi Group said.

Scomi Group's share trade was suspended between 9:33am and 12:30pm today in conjunction with the completion agreement announcement. Prior to the suspension, the stock was traded up 0.5 sen or 8.33% at 6.5 sen.