Ekovest loses RM2b Pan Borneo Highway job

PETALING JAYA: Ekovest Bhd said today it has lost the much-coveted RM2.11 billion contract to build the longest stretch of the Pan Borneo Highway after the project delivery partner, Lebuhraya Borneo Utara Sdn Bhd (LBU), vetoed the sub-contracting of the award obtained by Samling Resources Bhd in 2016.
In a filing with Bursa Malaysia, Ekovest said it received a letter on Monday from Samling Resources, informing them that LBU has not consented for the project to be sub-contracted to the JV company.
As such, Samling Resources is claiming that the JV company cannot carry out the project and that the JV agreement is now void. LBU is the project delivery partner for the Pan Borneo Highway project.
“We are reserving our rights in relation to the above matter and are seeking advice and will take all necessary action as may be required,” said Ekovest.
It does not expect the matter to have any material effect on the operations and financials of the group.
In December 2016, Samling Resources was awarded two packages under the project, one of which was Sematan to Sungai Moyan bridge plus Kuching-Serian roundabout interchanges stretch, covering 95.4km, the longest of the 11 stretches of the highway project.
This package involves the construction of six interchanges, 22 bridges, nine pedestrian bridges and 93 bus shelters along that stretch of road.
In January 2017, Ekovest’s wholly owned subsidiary Ekovest Construction Sdn Bhd entered into a JV and shareholders agreement with Samling Resources for the proposed project.
Under the agreement, Samling Resources would hold a 70% stake in the JV company, Samling-Ekovest JV Sdn Bhd while Ekovest would hold the remaining 30%.
It was reported that Samling Resources would sub-contract the project in its entirety to Samling-Ekovest at the same price at which the project was awarded to Samling Resources.
On Bursa Malaysia today, Ekovest was up 2.48% or 1.5 sen, to 62 sen on volume of 17.8 million shares.