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MAHB terminates RM743 mil Pestech contract for KLIA Aerotrain project over delays | Scoop
According to Malaysia Airports Holdings Bhd, the RM742.95 million contract was terminated due to Pestech International Bhd's non-performance, which jeopardised significant project milestones and posed a risk of project delivery delays. – klia.info pic, August 16, 2023
News

MAHB terminates RM743 mil Pestech contract for KLIA Aerotrain project over delays

Decision based on PTSB's inability to meet obligations, resulting in significant setbacks

Scoop Reporters
Updated
6:10 PM MYT

 

KUALA LUMPUR – Malaysia Airports Holdings Bhd (MAHB) has cancelled the RM742.95 million agreement awarded to Pestech International Bhd (PTSB) for the construction and provision of a new automated people mover (APM), also known as an aerotrain project, at the Kuala Lumpur International Airport (KLIA). 

This decision comes as Pestech International Bhd failed to meet the stipulated project timeline, MAHB said in a statement.

The termination was officially conveyed by MAHB subsidiary Malaysia Airports (Sepang) Sdn Bhd (MA Sepang) on August 16, 2023, to Pestech. 

The termination involved the contract for the design, supply, installation, testing, and commissioning of the aerotrain at KLIA.

PTSB was designated by MA Sepang as the design and build (D&B) contractor for the KLIA Aerotrain Replacement Programme on December 14, 2021, following a competitive tender process.

This decision to terminate the contract stems from various factors, notably PTSB’s inability to fulfil its obligations, resulting in substantial setbacks at crucial project milestones.

Among others, MAHB said the termination is due to PTSB’s non-performance, which compromised significant project milestones and risked delays in delivering the project within the required deadline. 

This decision was taken by MAHB’s board of directors, in accordance with MAHB’s principles of governance, and based on rigorous monitoring of the progressive development of the APM project by MAHB’s management and its independent consultants. 

“PTSB has been found to be in material breach of its obligations under the contract and has failed to remedy the same within the specified time period,” MAHB said.

Following this notice of termination, which was preceded by a notice of default to PTSB, MA Sepang will be enabled to recommence and complete the works through the engagement of other relevant parties, with a focus on ensuring the project is completed on schedule.

MAHB said it remains committed to assigning the necessary resources in order to minimise any potential delays to the APM project. 

It said MA Sepang will expedite consultation and discussions with all existing stakeholders who are presently involved in the APM project for continuity and to mitigate any delays, with immediate effect.

MAHB added that these include working closely with all relevant parties involved in the replacement project of the train’s tracks and system, as well as identifying an experienced and credible third-party contractor to ensure consistent progress of all project components.

“This project is of significant importance to ensuring the comfort and convenience of our passengers travelling through KL International Airport,” MAHB managing director Datuk Sri Iskandar Mizal Mahmood said in the statement.

“Our focus moving forward is on the timely delivery of the aerotrain while observing stringent quality control and safety standards of the project, with no compromise to our operations and governance processes.” – August 16, 2023

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