Muhibbah to pursue RM581m counterclaim for Australian jobs

PETALING JAYA: Muhibbah Engineering (M) Bhd will pursue a counterclaim through its joint venture in excess of A$200 million (RM581 million) to recover costs associated with changes in scope and nature of two contracts in Australia.
Its wholly-owned subsidiary Muhibbah Construction Pty Ltd holds a 50% interest in Monadelphous Muhibbah Marine JV (MMM), a joint venture with Monadelphous Engineering Pty Ltd.
Muhibbah has entered into two contracts through MMM for the construction of the approach jetty and ship berth, and shiploader, associated with the Wiggins Island Coal Export Terminal at Queensland for Wiggins Island Coal Export Terminal Pty Ltd (WICET).
"The company considers MMM has good grounds for making such claims," Muhibbah said in a filing with the stock exchange yesterday.
WICET has filed a claim relating to the MMM contracts and associated costs in the Supreme Court of Queensland totalling A$130 million, the majority of which include those paid to MMM under the Building and Construction Industry Payment Act 2004 (BCIPA) and variations previously approved by WICET. The claim names the MMM joint venture parties as defendants, along with each of the respective parent companies.
"MMM and Muhibbah are of the view that the WICET claims are unwarranted and will vigorously defend the proceedings," it said.
The work under the contracts is completed and MMM has been granted practical completion. MMM has to date received successful payments pursuant to adjudication under BCIPA for payments relating to the two contracts, totalling A$90 million. MMM expects to submit further claims under BCIPA.