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Wednesday, August 6, 2008

UEM Builders seeks govt clarification on Penang bridge work

KUALA LUMPUR: UEM Builders Bhd said that the scope of work awarded to it by Jambatan Kedua Sdn Bhd (JKPP), the company that owns the Second Penang Bridge, over-lapped with the scope of work being negotiated by its parent company, UEM Group Bhd, with the government.

In a statement to Bursa yesterday, UEM Builders said that its parent company UEM Group Bhd (UEMG) was in negotiations with the government pursuant to an earlier decision made by the government to award the project to UEM group on a concession (build-operate-transfer) basis.

“We understand from UEM Group that the government has not withdrawn its instructions to them (UEM Group). As this matter may result in substantive contractual consequences, we will seek clarification from the government. In the meantime, we are not in the position to comment further on this subject but will stand guided by the government’s decision,” said UEM Builders.

Last year, the government awarded the Second Penang Bridge project to UEM Group on a concession basis. UEM group subsequently awarded the construction of the job to a joint-venture of Chinese Harbour Construction Company (CHEC) and UEM Builders with the former holding 51%. Both parties were supposed to firm up a shareholders’ agreement but could not do so as they did not see eye-to-eye on certain matters pertaining to the apportionment of cost.

The Edge Weekly reported that the government has established JKPP to award the constracts direct to the companies and oversee the construction. It was reported that CHEC was awarded a RM2.3 billion job while UEM Builders got an award for a RM1.3 billion job, much lower than the estimated RM2.2 billion it was supposed to get.

UEM Builders confirmed that had it received a letter from JKPP on July 30 informing that it had taken over the duties of the Special Task Force and offered certain works on the Second Penang Crossing Bridge project to UEM Builders.

By The EDGE Malaysia (by Mohd Yuzam Yusa)

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