MA Sepang cancels Pestech’s RM742mil contract, Dewan Rakyat told

PETALING JAYA: Pestech Technology Sdn Bhd’s (Pestech) contract was cancelled by Malaysia Airports (Sepang) Sdn Bhd (MA Sepang) because the company did not abide by its contractual obligations, the Dewan Rakyat was told.

“The decision was taken by the Malaysia Airports Holding Berhad (MAHB) board of directors, abiding by the MAHB administrative principles and based on MAHB and independent consultants’ continuous monitoring of the Automated People Mover (APM) project progress.

“Pestech was found to have gone against material obligations in the contract and failed to take action to address issues within the deadline,” said Transport Minister Anthony Loke in a written parliamentary reply on Wednesday (Nov 1).

Loke was responding to Ayer Hitam MP Datuk Seri Dr Wee Ka Siong, who asked about the justification behind the cancellation of the RM742.95mil contract awarded to Pestech to build a new aerotrain system in KLIA and what is the ministry’s solution to the issue.

“The termination was due to the incompliance of contractual obligations, which affected the project’s progress, and it has the risk of running to delays on completing the project,” said Loke.

Loke said that the termination notice will enable MA Sepang to resume and complete the project with the involvement of other contractors to ensure that the project can be completed according to schedule.

Loke also said MA Sepang has carried out negotiations and discussions with all stakeholders in the APM project to reduce any possibilities of delays.

“These include efforts to work closely with all parties involved in this project, aside from identifying third-party contractors who are experienced to ensure all APM project components can continue to run consistently,” added Loke.

MA Sepang had appointed Pestech as the design and build contractor for the KLIA Aerotrain Replacement Programme, worth RM742.95 million, on Dec 14, 2021, through an open tender process.