Bakun project firms in deal to withdraw all claims

PETALING JAYA: The construction companies involved in the building of the Bakun hydroelectric dam project had entered into two agreements which among others facilitated all claims against each other be withdrawn.

The construction of the Bakun hydroelectric dam was undertaken by Malaysia-China Hydro Joint Venture (MCH JV) and was completed more than three years ago. The construction of the project, called CW2, was delayed and there was cost overrun. The contractors also filed counter claims against Sarawak Hydro Sdn Bhd, a Finance Ministry-controlled entity that owned and managed Bakun.

In a filing with Bursa Malaysia, Sime Darby said it had entered into a supplemental agreement with the other parties that undertook the construction works. They are Sinohydro Corp, WCT Bhd (formerly known as WCT Engineering Bhd), MTD Capital Bhd, Edward & Sons (EM) Sdn Bhd, Ahmad Zaki Resources Bhd and Syarikat Ismail Ibrahim Sdn Bhd.

In this supplemental agreement, the parties agreed to release and withdraw all claims, actions and demands related to or arising from the MCH JV and/or CW2 contract

Sime Darby also announced that it had entered into a settlement agreement in respect of the CW2 contract with Sinohydro, WCT and MTD, where they collectively agreed to bear and settle all costs in relation to MCH JV’s pre-existing and future rights, obligations and liabilities in relation to the CW2 contract.

“This is done according to the agreed proportions and on terms and conditions as set out in the settlement agreement,” Sime Darby said.

Sime Darby, through Sime Darby Engineering and Sime Engineering Sdn Bhd, has an effective interest of 35.7% in the MCH JV.

WCT, which has a 7.7% stake in MCH JV, and Ahmad Zaki also made similar announcements yesterday.