PETALING JAYA: IJM Corp Bhd has been terminated as the works contractor for the underground package of the Light Rail Transit Line 3 (LRT3) from Bandar Utama to Johan Setia.
In a filing with Bursa Malaysia, the group said that its wholly owned subsidiary IJM Construction Sdn Bhd received a notice of termination on Monday from MRCB George Kent Sdn Bhd.
“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,” it said.
Under the new contractual framework, MRCB George Kent’s employment was terminated. The company was the project’s PDP under the PDP agreement with Prasarana Malaysia Bhd.
Following the termination and pursuant to the conditions of contract, MRCB George Kent has issued the notice to IJM Construction.
To recap, IJM announced the letter of acceptance for the project on March 13, 2018, at a contract sum of RM1.1 billion.
Preliminary works had commenced before the project was suspended in June 2018. IJM Construction is currently consulting its advisers and will seek appropriate legal redress under the contract.
Apart from the potential earnings from the project, the termination is not expected to have any significant effect on the group’s financial position.
IJM’s share price rose 1.25% to close at RM2.43 today with 2.52 million shares traded.