Encorp sues contractor over delays and subpar work

KUALA LUMPUR (April 11): A unit of property developer Encorp Bhd has filed a lawsuit against its contractor to claim for liquidated damages of RM24.63 million, because of a project delay.

In a stock exchange filing today, Encorp said its unit Must Ehsan Development Sdn Bhd had today served a writ of summon and statement of claim on Bumimetro Construction Sdn Bhd, and is also seeking a Qlassic penalty of RM3 million for failure to score a minimum of 85% and an interest at the rate of 5% per annum, on the sum of RM27.63 million until the date of full settlement, besides relevant costs and other relief.

Qlassic — which stands for Quality Assessment System in Construction — is a system or method to measure and evaluate workmanship quality of building construction works, based on established construction standards.

Bumimetro was appointed by Must Ehsan as the main contractor for main building works construction for a proposed mixed development project in Kota Damansara, Selangor. The single block development comprises of a three-storey retail component, 34 storeys of serviced apartment, five storeys of car park, a facility floor and a basement level.

Encorp said today that Bumimetro had failed to complete the project within the timeframe, as stipulated in the agreement.

The civil suit has been fixed for case management on May 7 at the Shah Alam High Court.

Encorp, which largest shareholder is the Federal Land Development Authority (FELDA), was not traded today. At its current price of 50.5 sen, its market capitalisation is RM148.48 million. — theedgemarkets.com

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