MAHB Seeks RM298 Million Compensation from Consultants

23rd Dec 2016

Malaysian airport operator, Malaysia Airports Holding Berhad (MAHB) is seeking compensation from the three consulting companies that were involved in the KLIA2 terminal project. MAHB has filed for arbitration against the following companies:

1. KLIA Consultancy Services Sdn BHD,
2. Straits Consulting Engineers Sdn Bhd
3. HSS Integrated Sdn Bhd

MAHB is seeking compensation a total compensation of RM298 million (US$66.5 million) from all three.  Individually, MAHB is claiming against KLIA Consultancy Engineers to be liable for its losses and damages (wholly or partly) of RM148.9 million (US$33.2 million) as at October, 2016. It is also claiming RM84.3 million (US$18.8 million) from Straits Consulting Engineers (also as at October, 2016) and RM64.6 million (US$14.4 million) from HSS Integrated as at May, 2016.

Malaysia Airports is also seeking interests, costs and anything else the arbitrator would see as fit and just from the three consulting companies.

Responding to this, HSS Engineers said its associate HSS Integrated said:

Until the date of this announcement (Thursday), MAHB has failed to provide the supporting documents sought by HSSI. In the circumstances, HSSI is of the view that the alleged claim is unsubstantiated and without merit and have denied and refuted the same.

HSSE continued in its statement:

Further, the company and HSSI are of the view that the notice of arbitration is premature given MAHB and HSSI are in an ongoing mediation as required pursuant to the MOA. HSSI shall take all necessary steps to defend and safeguard HSSI’s interests in the arbitration proceedings, including but not limited to seeking legal advice on the merits of the claims and whether the commencement of arbitration by MAHB is premature or wrongful given the ongoing mediation proceedings.

MAHB did not disclose details of its dispute in the announcement to Bursa Malaysia, but it is believed that the claim has to do with the long delay in the opening of KLIA2. Initially, KLIA2 was planned for opening in 211, but operations began much later in May 2014,

Back in 2013, Malaysia Airports also said it would seek liquidated and ascertained damages from contractors for the delay in constructing the low-cost carrier terminal.