By RUPINDER SINGH
KSK Land has terminated its contract with Grand Dynamic Builders Sdn Bhd (GDBSB), a wholly-owned subsidiary of GDB Holdings Berhad (GDB) as the main contractor for its flagship 8 Conlay development.
KSK in a statement today said the “difficult decision to terminate the contract between DDCSB and GDBSB follows a failure to achieve agreeable solutions to various disputes relating to construction site matters over a period of the last nine months, including scope of works, construction programme, and financial instalment payments following the Covid-19 pandemic.”
Throughout the process of discussions, KSK said there have also been an increasing number of conditions imposed by GDBSB, culminating in a series of demands communicated on April 4, 2023.
In the communication, it said that GDBSB requested for DCSB to novate all existing nominated sub- contractors (NSCs) within a two-week period, and to take on all liabilities and responsibilities thereafter as well as for any matters arising prior to the determination of the NSCs.
Furthermore, it added that GDBSB also asked to be removed from main builder works, and for DCSB to pay for the loss of profits arising from that.
“These stipulations are extremely one-sided and unreasonable on the part of GDBSB as 8 Conlay’s main contractor, and despite best efforts to find a viable solution for each matter, it has become impossible for KSK Land and DCSB to accommodate or fulfill them,” KSK said.
Since then, KSK Land said it has been in discussions with potential new main contractors, including Conlay Construction Sdn Bhd, who has formally submitted an offer to DCSB.
Meanwhile, in a separate release, GDB said GDBSB received a copy of the notice of determination from 8 Conlay project owner DCSB to determine the letter of award dated November 9, 2020 for the development of the 8 Conlay project.
GDB said GDBSB maintains that the purported determination is wrongful as the mandatory contractual procedures and notices prior to the determination have not been complied with.
“DCSB has no right to determine GDBSB’s employment under the main contract given that there are existing and continuous breaches by DCSB for failure to effect payment of certified sums due and owing to GDBSB under interim certificates,” said GDB.
Since March 24 2023, GDB said it has remobilised and recommenced construction works for Tower A only after a total prolonged duration of 220 days for suspension under Clauses 30.7 and 21.4 of the PAM Contract 2006 due to non-honouring of multiple interim certificates by DCSB.
“DCSB has failed, refused, and/or neglected to pay the remaining outstanding sums on the date of payment as stipulated in the January 4, 2023 agreement and continue to breach.
“Therefore, the board of directors is of the opinion that the notice of determination served by DCSB is unjustified and will defend the claim,” GDB said.
GDBSB said it has exercised its immediate right to immediately determine the contract and has served a notice of determination dated April 19, 2023 to DCSB, a unit of KSK Land Sdn Bhd, pursuant to Clause 26.2 of the PAM contract and January 4, 2023 agreement.
In a separate hours filing, GDB said the execution of the determination is expected to have a material impact on the group’s earnings, net assets and net asset per share for the current financial year ending December 31, 2023.
Nonetheless, it said that it is not able to provide any disclosure on the impact of the announcement as it is currently under assessment.
“The determination is also expected to have a material impact on the business and operations of the group as the 8 Conlay project is the largest contract in the group’s current order book,” it said.