Sarawak Consolidated Industries Berhad (“SCIB” or the “Company”), a civil engineering specialist, today announced that the Company has mutually agreed with clients and subcontractors to terminate contracts of six projects located in Oman and Qatar after coming to terms on the full and final settlement of debts as well as the establishment of a schedule for amount owning between the parties to the contracts.
SCIB, together with the clients and subcontractors, agreed on the mutual termination of the contracts after taking into consideration COVID-19 restrictions that have severely curtailed availability of manpower as well as limiting travel and affecting management of the projects. The termination of the contracts entail that all parties acknowledge the debts owing as final and conclusive and to settle all debts among themselves.
The projects affected by the termination are six villas in Qatar first announced in October 2019; nine villas in Oman first announced in October 2019; 18 five-story buildings in Qatar first announced in April 2020; two service centers in Qatar first announced in April 2020; civil works for a fire water project in Qatar first announced in December 2020 and; 20 villas in Oman first announced in April 2020.
Group Managing Director / Chief Executive Officer of SCIB, Rosland bin Othman said, “We decided on the termination after discussions and reviewing the commercial viability of the projects in light of the COVID-19 situation that has made it difficult to meet project schedules. We also have problems securing financing for projects given the current market conditions”.
“While there will be some impact, the decision taken to terminate the contracts is in the long-term best interests of the Company and its shareholders. The termination of the contracts comes with a final settlement and there is no further penalty or punitive damages imposed on SCIB from clients and subcontractors”.
“Our other projects continue as scheduled and we are looking for opportunities in Malaysia and Asean where we are focusing on basic public infrastructure needs. There is also the added advantage of being better able to control costs and a cheaper workforce while we can leverage on our strengths as the largest precast concrete and Industrialized Building System (“IBS”) manufacturer in East Malaysia”.
“Our IBS offerings and adoption of 3D technology will also give us a competitive edge as projects become more efficient and can be completed in shorter periods with quality building material. We will continue to deal with the challenges of the more volatile operating landscape by ensuring that costs are managed well and take other prudent measures to ensure business continuity and sustainability”.
