MAHB terminates Pestech’s RM742.95mil aerotrain contract

KUALA LUMPUR: Malaysia Airports Holdings Bhd’s (MAHB) wholly-owned subsidiary, Malaysia Airports (Sepang) Sdn Bhd (MA Sepang), has terminated Pestech Technology Sdn Bhd’s (Pestech) contract to supply, design and build an automated people mover (APM) or aerotrain at the Kuala Lumpur International Airport (KLIA).

In a statement, the airport operator said the termination was due to Pestech’s non-performance, compromising significant project milestones and risking delays in delivering the project within the required deadline.

“This decision was taken by MAHB’s board of directors, in adherence to MAHB’s principles of governance and based on rigorous monitoring of the progressive development of the APM project by MAHB’s management and its independent consultants.

“Pestech has been found to be in material breach of its obligations under the contract and has failed to remedy the same within the specified time period,” it said.

To recap, Pestech had been appointed by MA Sepang 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.

MAHB managing director Datuk Seri Iskandar Mizal Mahmood said this project is of significant importance to ensuring the comfort and convenience of passengers travelling through KLIA.

“Our focus moving forward is on the timely delivery of the aerotrain while observing stringent quality control and safety standards of the project, with no compromise to our operations and governance processes,” he said.

MAHB said that following the notice of termination, which was preceded by a notice of default to Pestech, MA Sepang would be enabled to recommence and complete the works through the engagement of other relevant parties, focusing on ensuring the project is completed on schedule.

The company said it remains committed to assigning the necessary resources to minimise potential delays to the APM project.

With immediate effect, MA Sepang will expedite consultation and discussions with all existing stakeholders presently involved in the APM Project for continuity and to mitigate any delays.

It added that these include working closely with all relevant parties involved in the replacement project of the train’s tracks and system and identifying an experienced and credible third-party contractor to ensure consistent progress of all project components. – BK