'It is May 2014 now'

KUALA LUMPUR: The new low- cost carrier terminal (LCCT), klia2, whose opening has been deferred a few times, has now been scheduled for a May 2, 2014 opening.

The new date comes a day after Malaysia Airports Holdings Bhd (MAHB) imposed liquidated ascertained damages (LAD) on its main contractor, UEMC-Bina Puri JV.

In a statement yesterday, MAHB said UEMC-Bina Puri JV has confirmed that it will complete the construction of klia2 by April 30 next year.

This will include securing the Certificate of Completion and Compliance (CCC) and Operational Readiness and Airport Transfer as per the company’s contractual obligations.

“MAHB will continue to monitor the progress of work being done by all the contractors and LAD will be imposed according to the contractual obligations of each contractor,” MAHB said.

UEMC-Bina Puri JV is a 60:40 collaboration between the UEM Group’s unit, UEM Construction Sdn Bhd, and Bina Puri Holdings Bhd. In July 2010, the JV was awarded a contract worth RM997.23 million  to construct klia2’s terminal and satellite buildings, the link bridge between the buildings as well as several sector piers to the sides of both buildings.

On Monday, UEMC-Bina Puri JV was slapped with LAD of RM199, 455 per day or RM6 million a month following its failure to complete construction work as scheduled.  The new LCCT was scheduled to open on June 28 to commemorate the 15th anniversary of the opening of the Kuala Lumpur International Airport (KLIA).

MAHB said with safety and quality being of utmost priority, the contractors are required to ensure that the completion of the klia2 terminal building complies with all safety standards as required by the regulators and MAHB itself.

UEMC-Bina Puri JV also issued a statement yesterday, saying that it is committed to the handover date of April 30 next year.
UEM Builders Bhd managing director, Mohd Razin Ghazali, said the JV partners aim to complete the remaining 7% physical construction of klia2 on time.

“Upon achieving physical completion, we together with MAHB will immediately work towards obtaining the CCC from the relevant authorities, which typically takes up to eight weeks.

“After that, MAHB will undertake the Operational Readiness & Airport Transfer, a process that takes an estimated three months to complete. Full handover of klia2 to MAHB is targeted for April 30, 2014.”

Razin said whilst the JV partners are working rigorously to meet the new target opening date, it will do so without compromising the safety, quality and operational efficiency of the airport.

Bina Puri executive director, Mathew Tee, said the LAD is a standard clause found in any construction contract and added that the JV company will revisit the matter separately upon handing over the project to MAHB.

On the cause of the previous delays, he said while the JV partners had requested for several extensions, the approved extended period granted by MAHB was not sufficient to undertake the construction work.

Request for extension was mainly due to the various design changes, including variation works on the baggage handling system and unexpected ground conditions which required additional piling and temporary sheet pile.

Tee had previously told the media that he was confident the company would not be obliged to pay compensation for its failure to meet the construction deadline as the delay was caused by the changes made to the design of the terminal.

Bina Puri had asked for a third extension of time (EOT) until September or October this year to carry out minor additional works at klia2.

According to Tee, Bina Puri has completed 93% of its portion of the klia2 project.

However, MAHB did not grant the additional extension sought by the JV partners.

Besides the UEMC-Bina Puri JV, other companies that have won klia2 contracts were Gadang Holdings Bhd, WCT Bhd and KUB Bhd. Both Gadang and WCT were involved in the earthworks, which was completed in the early stages of the project.

This article first appeared in The Edge Financial Daily, on JUNE 19, 2013.

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