The government today gave its assurance that it will "try its very best" to settle the outstanding claims from a group of contractors for work done on a portion of the 179km Rawang-Ipoh electrified double-tracking railway project.

About 20 contractors from 13 companies met with Transport Ministry secretary-general Zaharah Shaari in Putrajaya this morning for almost an hour to present their case and submit their claim documents, each detailing the sum owed by second-tier contractor Teknik Naga Sdn Bhd.

Teknik Naga, hired by Perspec Prime (M) Sdn Bhd, a subsidiary of DRB-Hicom Bhd, claimed it did not have the money to pay third- and fourth-tier contractors because it has yet to receive payments from Perspec Prime.

But DRB-Hicom maintained that it has kept payments on schedule. In its Q3 interim financial report submitted to the Kuala Lumpur Stock Exchange (KLSE), the company stated that Perspec Prime had paid RM38 million to Teknik Naga as per the terms of the sub-contract.

Encouraging meeting

A contractor, who only wished to be known as Mohamad, said the outcome of the meeting was encouraging.

"There was an indication that pressure would be applied on Perspec Prime or DRB-Hicom to settle about RM7-8 million in payments to the sub-contractors, many of whom are not here today," he said when met later.

"I feel the matter would be resolved before Chinese New Year (which falls on Jan 22), even though the government was unable to give a time-frame," said another contractor who wished to remain anonymous.

Besides Zaharah and her officials, also present was a representative from state-owned railway corporation, Keretapi Tanah Melayu Bhd.

Despite the overall optimism, one of the sub-contractors who transported sand and earth was sceptical over the government's commitment to resolve the matter that has dragged for more than a year.

The contractor, who also wished to remain anonymous, said Teknik Naga owed her more than RM80,000 but had struck a bargain to pay about RM56,000 immediately.

"We thought the money would be paid immediately, which is why we agreed to a discount. Teknik Naga even offered another option as a settlement, but we have not heard anything from them and it's been over a year now," she said.

"Both Teknik Naga and Perspec Prime are giving us the runaround. One says the other has not paid anything while the other claims to have overpaid. We are the ones who are suffering as this has badly affected our business."

The group was led by Kubang Kerian MP Husam Musa, who first highlighted the plight of the sub-contractors who mostly ran small-time businesses.

According to Husam in a memorandum to Transport Minister Chan Kong Choy, the sub-contractors are allegedly being harassed by Teknik Naga whenever they demand payment.

Early last month, 10 sub-contractors sought the help of the opposition leader, allegedly after Teknik Naga had refused to meet them.

Four parties sued

In a related development, Teknik Naga is suing four parties, including Perspec Prime and DRB-Hicom, for breach of contract, non-payment of more than RM25 million, unlawful interference and defamation.

Perspec Prime was named the first defendant in an action seeking general, special and exemplary damages, plus an annual interest of eight percent on the total sum.

In the suit filed last year, Teknik Naga is seeking general damages for the termination of the sub-contract arising from the breach.

It named DRB-Hicom, its group director (special projects) B Bhaskaran Pillai and infrastructure company Road Builders (M) Sdn Bhd as the second, third and fourth defendants respectively.

When contacted, a DRB-Hicom spokesperson, referring to its Q3 interim financial report to the KLSE, said the company lawyers, who are also representing Perspec Prime and Bhaskaran, had filed to strike out Teknik Naga's application to amend the writ and statement of claims.

The Kuala Lumpur High Court is expected to decide on the matter in two weeks' time.