KUALA LUMPUR: Pestech International Bhd's last ditch effort to convince Malaysia Airports Holdings Bhd (MAHB) to reinstate it as the design and build contractor for the KLIA aerotrain replacement programme fell flat, after the airport operator said it has initiated the process of securing a new contractor.
Last Friday, Pestech in a filing with Bursa Malaysia Securities Bhd said, the termination by MAHB's unit was "misconceived and invalid" and warranted legal redress, however it was seeking an amicable resoution and had sent MAHB a formal letter to the effect.
In a separate announcement Pestech had said the termination would pose unfavourable effects to the revenue and profit of the group for the financial year ending June 30, 2024.
In response to queries from New Straits Times, MAHB said it has initiated the process of securing a reliable third-party contractor to undertake its KLIA aerotrain replacement programme, in an effort to prevent further delays in the completion of required infrastructure projects.
The entire asset replacement programme is to take three years and scheduled to complete by March 2025.
The first phase involving design works was until March 2023, where multiple stakeholder engagements are conducted to ensure that the new aerotrain system meets both local and international transport and safety standards.
The second phase between March 2023 and March 2025 was for the construction of the new aerotrain.
"MAHB remains focused on the timely delivery of the aerotrain while observing stringent quality control and safety standards of the project."There will be no compromise to our operations and governance processes," the airport operator told New Straits Times.
MAHB explained that the decision to terminate Pestech was taken by the board of directors after a thorough deliberation process.
"This included a full assessment by an independent third party, as well as an assessment of all possible ramifications," it said.
MAHB said there was continuous engagement with Pestech throughout this entire process.
In adherence to due process, a notice of default was issued for Pestech to remedy the default.
This was then followed by additional engagement sessions.
"The notice of termination was issued on August 16, 2023 after Pestech failed to remedy the default within the specified time period," MAHB said.
The airport operator said it has obtained the advice of its solicitors to ensure that the termination is carried out strictly in accordance with the contract's terms and conditions.
Pestech's share price closed 3.49 per cent lower on Friday to 24.5 sen, while MAHB's share price was down 0.15 per cent to RM6.82.