PLB requests for extension on Penang project

by ASILA JALIL / pic credit:

PLB Engineering Bhd applied for a four-month extension to the Penang Development Corp (PDC) to fulfil the conditions of the conditional joint development agreement (JDA) signed between both parties for the rehabilitation of the Jelutong dumpsite in Penang.

In a Bursa filing yesterday, PLB Engineering stated that an application for the extension was made on Monday and PDC had yet to respond to the application.

“The board shall endeavour to ensure there is no delay in fulfilling all the conditions precedent in the JDA and in any future agreements to be entered into, if any, and should there be any delay beyond the agreed time period, the board shall apply/negotiate with the relevant parties to extend the said period prior to its expiry,” it said.

The group said there is a possibility the project may not be completed within the time stipulated in the JDA due to various factors such as labour and material supply shortages, unsatisfactory performance or non-performance of contractors and sub-contractors, natural disasters and the pandemic, among others.

On Feb 21, the group entered into a JDA with the Penang state government and PDC to undertake the rehabilitation works of the existing dumpsite measuring approximately 84 acres (34ha), along with the additional area in excess of the existing area.

The joint development also entails the construction and operation of a new integrated recycling centre to be located on a site to be procured and acquired by PLB Engineering or its subsidiary for receiving, sorting and recovery of construction and demolition of waste, green waste and excavation waste, for reusing or recycling.

PLB Engineering also announced on March 20 that it entered into a memorandum of understanding (MoU) with China Railway Engineering Corp (M) Sdn Bhd (CRECM) to establish a basis of cooperation and collaboration for the engineering, procurement and construction (EPC) work for the rehabilitation works of the Jelutong dumpsite.

CRECM will receive 90% of the land PLB Engineering is entitled to under the JDA.

“If the binding agreement is not executed within the time stipulated in the MoU, the company may be required to appoint another EPC provider for the purpose of the rehabilitation works,” it added in the exchange filing yesterday.

If PLB Engineering fails to complete the rehabilitation works and new integrated recycling centre within the time stipulated in the JDA, there will be a liquidated agreed damages of RM100,000 per day for each day of delay until the expiry of the stipulated time for the completion of the rehabilitation work.

As for the new integrated recycling centre, there will be a liquidated agreed damages of RM15,000 per day.

“In addition, an area measuring not less than four acres of PLB Engineering’s entitled land (NIRC Security Land) will be set aside to form part of the Penang state government’s security land, and such land shall not be alienated to PLB Engineering and shall belong to the Penang state government absolutely in the event PLB Engineering fails to complete and commence operation of the New Integrated Recycling Centre,” the PLB Engineering filing stated.