KUALA LUMPUR – While parties involved in the construction of the RM4.2 billion Damansara-Shah Alam Elevated Expressway (DASH) are slugging it out in arbitration, subcontractors are left holding the baby with a number of them facing bankruptcy.
One of them who spoke to The Vibes said he had just been served a bankruptcy notice.
Last year, The Vibes reported that subcontractors are owed around RM80 million.
In June 2021 The Vibes reported on a legal dispute between turnkey contractor Turnpike Synergy Sdn Bhd – owned by DASH developer Projek Lintasan Kota Holdings Sdn Bhd (Prolintas) – and main contractor Panzana Enterprise Sdn Bhd that may leave the former’s subcontractors high and dry to the tune of RM100 million.
Panzana was handling all payments to contractors until they were terminated and Turnpike took over without signing new agreements with the contractors.
A consortium of contractors, Melima Consortium is now suing Turnpike Synergy for RM100 million in arrears.
Khajahari Construction Sdn Bhd director Bemin Kannan said he was left “high and dry”, therefore could not pay his supplier, a quarry works company.
“60% of my money is stuck with Panzana while the 40% of the outstanding amount is with Turnpike Synergy Sdn Bhd,” he said, claiming Panzana owes his company RM6 million.
“My company got the winding up petition last December and received the garnishee notice in April last year after I failed to settle payments around RM270,000 to my supplier,” he told The Vibes.
The construction of DASH was divided between eight work package contractors (WPCs) via an open tender process, who in turn appointed various subcontractors and suppliers to complete the project.
Stretching a total of 20.1km, DASH connects Puncak Perdana to Penchala. The new highway began construction in 2016 and started operating on October 14, 2022.
Kannan recalled that in June 2020, there was a meeting attended by all subcontractors and the main contractor.
“Turnpike requested all of us to resume work and they stated that they would pay us until completion instead of waiting for payments from Panzana.
“At the meeting, we saw everybody including Turnpike, DASH consultants and all other subcons. They (Turnpike) said they will issue direct payment to us,” he said, adding that he and the other contractors continued with the project despite the absence of a contract with Turnpike.
“They promised to pay (us) whatever Panzana owes us. It was minuted but there was no letter from Turnpike,” Kannan said, explaining that his firm was responsible for the earthworks of some segments of the elevated highway construction.
He said the movement control order (MCO) was the turning point that stretched Khajahari’s limit and the capacity of several subcontractors.
“We continued until March (2021) when we got a letter from Panzana informing us that they were terminated. We were confused – and for my claim from June 2020 to March 2021 of RM1 million, I only got RM500,000. Turnpike paid until December 2020 and then stopped.
“Who’s responsible for that? If Turnpike has nothing to do with Khajahari, then why did you pay us in the first place?”
Another contractor who asked not to be named added that the prolonged matter is not in line with a compassionate government as propagated by the current administration.
He reminded that last year, Deputy Prime Minister II Datuk Seri Fadillah Yusof had decided to stay out of the matter.
Fadillah, when he was Works Minister, was quoted as saying that the government will not intervene in the dispute due to contractual and legal issues.
“We hope this policy has changed and we will see the government take a more proactive approach in resolving this issue that has impacted the livelihoods of many,” he said.
‘Turnpike discharged its duties, obligations’
In October last year, Prolintas explained that Turnpike had discharged its duties and obligations as a responsible main contractor by making payment on all relevant claims that had been verified, certified, and mutually agreed upon between the WPCs and the consultants.
“Any claims, allegations of non-payment, or disputes will be addressed via the processes stipulated in the contract between all parties including resolution via arbitration between Turnpike and the WPC,” Prolintas had said.
Kannan questioned why Turnpike dealt directly with the contractors and not with Panzana.
He said many subcontractors have engaged in a long legal battle after the opening of DASH last November.
Kannan also questioned the decision by Prolintas in terminating Panzana in the first quarter of 2021 and awarded a new company with a higher contract value.
“It is unusual when a main con had completed 90% of the job and received the termination.
“Then, they replaced Panzana with a new company and the new company asked us to give quotations.”
Prolintas officials when met declined to go on record, saying the matter was still in arbitration. – The Vibes, May 16, 2023
