Malakoff unit seeks damages from contractor over alleged failure to complete work at power plant

KUALA LUMPUR (March 12) : Malakoff Corporation Bhd’s subsidiary Tanjung Bin Energy Sdn Bhd (TBE) has commenced arbitration against the contractor that built its new coal unloading jetty and bulk handling system at its power plant in Tanjung Bin, Johor, saying there were multiple breaches of contractual duties.

The contractor, Consortium HSL-TGE-GASB, is a joint-venture comprising HSL Constructor Pte Ltd, HSL Constructor Sdn Bhd, Tecgates Engineering (M) Sdn Bhd and Gema Antara Sdn Bhd.

In a filing with Bursa Malaysia, Malakoff said the contractor had allegedly failed to complete all work stated in the contract, as required for the work to be considered as completed for the purposes of taking over by March 6, 2019 as agreed.

Accordingly, the contractor is obligated to pay to TBE, RM36.34 million being the liquidated and ascertained damages (LAD) under the contract, it said.

TBE said it therefore seeks a declaration by the contractor that TBE is entitled to the RM36.34 million payment.

It also wants the contractor to pay the company RM7.9 million, after deducting the remaining milestone claims of RM28.44 million from TBE.

TBE also demanded the contractor to deliver a warranty bond worth RM12.11 million, either in warranty bond form or cash payment.