Gamuda says to make ‘expenses and losses’ claims, not VO
KUALA LUMPUR, May 21 — Gamuda has denied news reports that it is seeking an additional RM1.5 billion to complete the Ipoh-Padang Besar Electrified Double Track (EDTP), but admitted that it will be seeking claims for “expenses and losses” caused by the government.
This comes after Business Times said in a report that the MMC-Gamuda consortium will ask for an extension for project completion from end-2014 to possibly 2016 and is poised to submit a RM1.5 billion variation order to the government for cost overruns.
Gamuda said in a statement this evening that there is no variation order but there will be, “in effect”, an expense-and-loss claim associated with the earlier extension of time (EOT) from 2013 to 2014.
“MMC-Gamuda’s claim will be in accordance with the terms as stated in our contract, but it is too early at this point to even determine the amount and it will be nowhere near RM1.5 billion as stated in the New Straits Times,” said Datuk Paul Ha, project director of the MMC-Gamuda Joint Venture.
Gamuda said that a variation order is a deviation or change in scope initiated by the client that differs from the original contract specified, while an expense-and-loss claim is compensatory payment to the contractor for actual additional expense incurred due to a delay caused by the government.
He also said the project is due to be completed by the end of 2014 and not 2016 as stated by the report.
“We would like to reiterate that there will be no new extension of time (EOT) for EDTP beyond 2014. The project was earlier granted an EOT from 2013 to 2014 by the government,” he said.
The financial section of the New Straits Times reported today that MMC-Gamuda will ask for the extension despite the northern sector EDTP project deadline already having been extended by two years.
It quoted sources as saying “there is already cost overrun for the project, which is halfway completed.”
The report said factors for the variation order claim include “incorrect estimation of the project’s work, the obstacles that the customer or project team discovers that require deviation from the original plan” and additional resources to be added to the project.
When contacted, Transport Minister Datuk Seri Kong Cho Ha declined to comment saying that MMC-Gamuda should respond to the report.
MMC, owned by logistics tycoon Tan Sri Syed Mokhtar al-Bukhary, was awarded the contract for RM12.49 billion along with its joint-venture partner Gamuda in December 2007.
The contract comprises the design and construction of the infrastructure and systems works for the entire 329km alignment of the EDTP for this sector.
Originally slated for completion in January 2013, it was delayed due to land acquisition issues, and is part of the troubled EDTP for the entire rail line running from Padang Besar in the north, to Johor Baru down south.
Once completed, the Ipoh-Padang Besar EDTP will cut travel time from Penang to Kuala Lumpur from nine to three hours.
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