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Friday, 13 July 2018 | MYT 12:00 AM

Lafarge’s RM270mil ECRL contract suspended

PETALING JAYA: Lafarge Malaysia Bhd’s RM270mil contract to supply cement to the billion-ringgit East Coast Rail Link (ECRL) project has been suspended.

The cement producer told Bursa Malaysia that China Communications Construction (ECRL) Sdn Bhd (CCC) had suspended the contract, as the Government is currently reviewing the project.

Lafarge said it received instructions from CCC yesterday on the suspension of the company’s cement supplies with immediate effect until further notice, following the instruction received by CCC from Malaysia Rail Link Sdn Bhd (MRL) on July 3 on the ECRL project’s suspension.

On March 19, Lafarge’s wholly owned subsidiary Lafarge Cement Sdn Bhd had entered into an agreement with CCC to supply cement to all eight packages of work for the ECRL project for RM270mil.

The contract was to expire on Dec 31, 2019 with the option of renewing it for a further two years.

China’s state-owned China Communications Construction Co Ltd was awarded the contract as the main contractor for the ECRL in 2016. The contract was secured by its Malaysian unit CCC.

“The suspension is not expected to have any significant financial impact on the operations and financials of the company in the financial period up to the date of the suspension,” Lafarge said.

It pointed out that the completed work would be compensated in accordance with the terms and conditions of the contract.