Daily Express
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Termination not by us: Builder

Published on: Friday, December 20, 2013

Kota Kinabalu: Sabanilam Enterprise Sdn Bhd, developer of the International Technology and Commercial Centre (ITCC-Penampang) said it is committed to completing the project despite the problem with Masenang Sdn Bhd.

"We reassure all our clients and investors that we will honour the terms and conditions on the Sale and Purchase Agreement (S&P) and deeply apologise for any inconvenience caused as a result of the problem with our former main contractor," said Sabanilam Group General Manager, Caesar Mandela Malakun.

Malakun claims Sabanilam did not terminate the contract with the project's main contractor, Masenang Sdn Bhd.

"We wish to clarify and put the record straight. It is not true that the contract, as implied, was 'terminated' by the developer.

The fact is the contract was terminated by Masenang themselves, for reasons best known to them by a letter issued by their lawyer," he said.

He claimed Masenang Sdn Bhd under Kong Hock Sian as Managing Director had given the notice of termination through legal counsel, Ronny Cham & Co, to cease all works on the project since Oct. 24, 2013.

Masenang officials were not immediately available for their version of what happened.

The ITCC-Penampang project has a gross built-up area of about 1.6 million square feet and comprises a shopping mall complex with a convention centre facilities as well a trade and exhibition areas once completed.

It also has a huge banquet hall capable of accommodating 170 tables as well as a 19-storey business hotel, a 16 storey office tower and a 295 room hotel suites or town condo. It would also have a huge basement car parking facilities.

According to Malakun, Sabanilam's position was that the notice was unlawful but nonetheless without prejudice to their rights had accepted Masenang's notice of termination as the main contractor for the ITCC-Penampang project.

"However, Masenang refused to leave the project site despite notice given to them by the consultant Architect, Billings Leongs & Tan Sdn Bhd, who is also the Superintending Officer (SO) for the project under the Pertubuhan Akitek Malaysia (PAM) Standard Form of Building Contract, 2006.

"Masenang had also demanded the amount of RM49.9 million on claims for work done, for machineries, as well as for 'loss of profit'," he said, Wednesday, in response to the Daily Express report on Tuesday entitled "Developer Gains Access To Sealed ITCC Project Site."

Malakun said Sabanilam could not agree to this high figure especially on the "loss of profit" computation. "Besides, Sabanilam had been consistently paying Masenang all their claims up to claim number 8, except for the last three claims plus up to the stoppage of work by Masenang.

"Any such payments must first be verified by the Consultant Quantity Surveyor before a certificate of payment can be issued by the Consultant Architect," he said.

Masenang's claims, which was calculated by themselves, was not agreed to by the developer, who also have some items of counter claims against Masenang.

"Due to this impasse between the two parties, Sabanilam offered to Masenang for a settlement through arbitration, as provided for under the PAM Standard Form of Building Contract 2006.

"However, Masenang had objected any settlement through arbitration arguing that the PAM Standard Form of Building Contract 2006 is not applicable.

"Sabanilam, therefore, had no choice but to write to the President of PAM Malaysia to request for the appointment of an 'arbitrator' which is now waiting to be processed," he said.

In the meantime, Malakun said Sabanilam and the Consultant Architect, had requested Masenang to leave the site after 14 days when the (new) Consultant Quantity Surveyor had recorded all works done through final joint inspection.

"However, Masenang adamantly still refused to leave the site and in fact since their stoppage of all works, they had put up a barricade at the main entrance to prevent entry by us (developer) and also the Project Consultants from carrying out their duty.

"Masenang also put up a huge 'Site Closed' signboard as well as cut off the electricity to the Consultants' Site Office, whilst their own side enjoyed uninterrupted power supply," he contended.

Malakun said they had also written a formal complaint to the Sabah Law Association (SLA) on the conduct of Masenang's legal counsel for not only threatening legal action against Sabanilam but also accusing its Directors and staff or agents of being "trespassers" as well as attempting to stage a "coup d'Žtat" if they enter the project site.

"When we stationed our own security personnel outside of the main entrance gate, the lawyer for Masenang Sdn Bhd, accused us of holding an 'illegal assembly'.

"We were also threatened with possible criminal charges by copying the letter to the office of the Jabatan Peguam Negara, Sabah or the Federal Attorney General," he said, adding that Sabanilam was now waiting for the outcome of its complaint for unethical conduct.

In this respect, he said they were left with no choice but to apply to the High Court for an Injunction Order to restrain Masenang from unlawfully continuing to take control of the site, even after their termination of the contract.

He noted that Masenang had also advertised through the newspapers for Tender on the sale of their equipment and machineries which includes tower cranes, a batching plant, cement mixer & dump-truck lorries and other equipment.

"They are inviting any interested buyers to view their equipment that are for sale at the ITCC site!" he said.

Malakun said the Injunction Order that was to Sabanilam by the Kota Kinabalu High Court was to prevent Masenang from "continuing to unlawfully occupying or entering the ITCC-Penampang project site and to prevent them from interfering with the developer to carry out works to complete the ITCC-Penampang project".

The ITCC-Penampang Project is listed by Sabah Economic Development and Investment Authority (Sedia) as a "private sector initiative Project" under the Sabah Development Corridor.

It is also supported by the Federal Government by virtue of being a recipient of a RM19.9 million Public Private Partnerships (PPP) Fund from Private Public Partnership Unit (UKAS) in the Prime Minister's Department.

The Project had also been described by the present Chief Minister as a "New Landmark" for the Penampang District.