Zecon shares fall 5% on contract termination

KUALA LUMPUR: Shares in engineering and construction firm Zecon Bhd fell 5% in early trade following the termination of Kuching hospital job.

The Kuching-based firm fell 5%, or two sen to 38 sen with 804,400 shares done.

Zecon has received a notice of termination from the Public Works Department (JKR) for the construction of Hospital Petra Jaya in Kuching Sarawak.

However, Zecon said it is of the opinion that the purported termination is wrongful and has sought legal advice on the termination.

"The company will be seeking legal redress, including initiating an action to challenge the termination through the courts," Zecon said.

The company received the letter of award for the construction of the RM495mil hospital on April 26, 2013, and the duration of the project was stated as 42 months.

Last month, Health Minister Dr Dzulkefly Ahmad announced that the Cabinet had in principle agreed to terminate the contract due to “unacceptable” work delays.

He was also quoted as saying that the hospital in Kuching was supposed to be completed on Nov 29, 2016, but as of June this year, only 34.54% of the project was done.

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