The Light Rail Transit Line 3 (LRT3) contract worth RM1.12 billion earlier awarded to IJM Corporation Bhd has been terminated due to the project being remodeled.

The company said wholly-owned subsidiary IJM Construction Sdn Bhd (IJMC) received the notice of termination for the underground works from MRCB George Kent Sdn Bhd (MRCB-GK) on Monday.

"The termination was due to the project being remodeled from a project delivery partnership model to a fixed price contract model pursuant to the direction of the government. The new contractual framework has resulted in MRCB-GK’s employment as the project delivery partner (PDP) under the PDP agreement with Prasarana Malaysia Bhd being terminated.

"Following the termination, and pursuant to the conditions of contract, MRCB-GK as the PDP, has issued the notice to IJMC," IJM said in a filing with Bursa Malaysia.

IJMC accepted the letter of acceptance for the project, an underground package of the LRT 3 is from Bandar Utama to Johan Setia, for a contract sum of RM1.12 billion, inclusive of six percent goods and services tax, on March 13 last year.

The project, involving the design and construction of an underground tunnel, stations, ancillary buildings and other associated works, was initially scheduled for completion in 31 months.

"Preliminary works had commenced before the project was suspended in June 2018. IJMC is currently consulting its advisers and will seek appropriate legal redress under the contract.

"Apart from the potential earnings from the project, the termination will not have any significant effect on the financial position of the group," added IJM.

- Bernama