M'sia Airports sued by contractor involved in Penang airport renovation

The Penang International Airport underwent a RM250mil upgrade a few years ago.

KUALA LUMPUR: A contractor involved in the upgrading of the Penang International Airport a few years ago has launched a RM43.99mil lawsuit against Malaysia Airports Holdings Bhd (MAHB).

In a filing with Bursa Malaysia on Thursday, the airport operator said it had received a writ of summons from Syarikat Pembinaan Anggerik Sdn Bhd (SPASB), which is claiming for the RM43.99mil and other claims on damages and interest.

This is due to the alleged losses and damages related to the works done by SPASB to develop and upgrade the Penang International Airport as well as to build/complete the site office, central utilities building and airside drainage works at the airport.

These claims are based on the letters of offer dated Sept 2, 2010, and Jan 13, 2011, and the related contract agreements.

To recap, the Penang International Airport underwent a RM250mil upgrade starting in 2010. The completion of the renovation works, initially scheduled for mid-2012, was delayed for months due to problems such as flooding and collapse of parts of its ceiling.

The upgrading works aimed at nearly doubling the airport’s floor area and boosting annual passenger capacity from 3.5 million to 5 mlllion passengers.

“The company has obtained a preliminary view from its legal counsel who considers that the company has a reasonably good prospect of defending SPASB’s claims,” MAHB said on Thursday.

It added that SPASB’s claims were not expected to have a material impact on the company’s earnings and net assets for this financial year ending Dec 31, 2017.

MAHB said it would give updates when something material developed.