KUALA LUMPUR: IJM Corp Bhd says its RM1.12bil contract for underground works on the light rail transit line 3 (LRT 3) project has been terminated.
The company, in a filing with Bursa Malaysia today, said its wholly owned subsidiary, IJM Construction Sdn Bhd (IJMC), had received the notice of termination from MRCB George Kent Sdn Bhd on July 8.
IJMC had been awarded the contract on March 13, 2018. Preliminary work had commenced before the project was suspended in June 2018.
"IJMC is currently consulting its advisers and will seek appropriate legal redress under the contract," it said.
Apart from the potential earnings from the project, IJM said the termination of the project would not have any significant effect on the financial position of the group.
In the filing, IJM said it had lost the contract because the LRT 3 project was remodeled from a project delivery partnership model to a fixed price model.
In July last year, the Finance Ministry in a statement had said that the LRT 3 project would resume at a total cost of RM16.63bil, compared with its original price tag of RM31.65bil.
Part of the reduction was contributed by the cancellation of a two-km tunnel and an underground station. The 37-km LRT 3 line connects Bandar Utama in Petaling Jaya to Johan Setia in Klang.