KLANG – Transport Minister Anthony Loke has downplayed Pestech Technology Sdn Bhd’s direct involvement in the Kuala Lumpur International Airport (KLIA) aerotrain replacement project.
Saying it is not a government contract, Loke said the main appointment was made to Alstom Transport Systems, which is a partner of Pestech and IJM Construction Sdn Bhd.
Pestech was sacked by MAHB for delays in the aerotrain project but has since returned to the job via the new joint venture with IJM.
“The appointment is to the original equipment manufacturer (OEM), which is Alstom. Pestech is a partner to Alstom,”
“So, the appointment is to Alstom together with IJM and Pestech, not Pestech per se,” he told a press conference at Port Klang Cruise Terminal today.
Instead, Loke said the project is under the purview of Malaysia Airports Holdings Berhad (MAHB).
“Of course, MAHB reports to the Transport Ministry, but the contract’s deliberation and awarding is purely under its board of directors.
“There is no interference directly from the ministry, even though our deputy secretary-general is a board member,” he added.
On Wednesday, it was reported that the contract for works on the aerotrain replacement project, awarded to a joint venture entity of Pestech and IJM (IJMC-Pestech JV) is worth a whopping RM175.64 million.
According to a filing with Bursa Malaysia by Pestech Technology’s parent company Pestech International Bhd, it is understood that its subsidiary holds a 40% participating interest in the joint venture, while IJM Construction holds the other 60%.
It added that Pestech Technology had accepted a letter of award from Malaysia Airports (Sepang) Sdn Bhd (MASSB) on January 16 for works in relation to design, supply, installation, testing and commissioning for the aerotrain replacement project.
The letter of award also covers associated works at KLIA awarded to Alstom Transport Systems (Malaysia) Sdn Bhd and the joint venture.
It also asserted that the project will positively contribute towards the revenue and earnings of Pestech International in accordance with the agreed milestone events to be recognised in the financial years ending September 30, 2024 to September 30, 2025.
MAHB began its aerotrain replacement programme in 2022 as the original aerotrain was at the end of its life, having begun operating some 25 years ago.
MASSB’s parent company MAHB announced that its agreement with Alstom and IJMC-Pestech JV is expected to incur a cost increase capped at 15%, bringing the aerotrain replacement project cost to RM456.1 million.
As part of the agreement, Alstom was given the prerogative to select its partners for works outside their scope, and selected the IJMC-Pestech JV for work scopes involving civil engineering and train power supply components, among others.
The agreement comes despite MAHB having had a previous dispute with Pestech International, as evidenced when MASSB cancelled the RM742.95 million agreement awarded to Pestech International in December 2021 for the construction and provision of the aerotrain, as the company failed to meet the stipulated project timeline.
“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,” MAHB said in a statement then.
Two days after the agreement cancellation, it was reported that Pestech International had submitted a Bursa Securities filing stating its position that the termination is “misconceived and invalid.”
The company said that it firmly disputes the termination as stipulated in the termination notice and will enforce its legal rights, if necessary, but would rather seek a civil resolution with MASSB. – January 19, 2024