KUALA LUMPUR (July 5): Integrated power infrastructure group Pestech International Bhd (KL:PESTECH) and state utility firm Syarikat Sesco Bhd have scrapped plans to undertake the Entinggan–B 275/(33)kV substation project worth RM109.98 million after taking into consideration the economic factors of the job.

In a filing with Bursa Malaysia on Friday, Pestech said its wholly-owned subsidiary Pestech Sdn Bhd (PSB) and Sesco have decided to opt for annulment of the notification of award (NOA) from the latter for the proposed project amicably. The award of the NOA was to signify that Pestech remained active and competitive in the procurement of new projects as well as remained positive towards the overall prospect of the industry that Pestech was operating in.

Pestech was supposed to undertake the proposed project in a joint venture (JV) with Sky High Construction Sdn Bhd. Under the JV, the allocation of the contract value to PSB was 60% and Sky High the remaining 40%.

Pestech said there will be no claims against each other arising from the annulment of the project.

"The board wishes to further announce that the annulment of Entinggan project does not pose significant impact to the group for the financial year ending Sept 30, 2024 since the project has not commenced," it added.

The development of the Entinggan substation was expected to ensure the reliability of electric supply and cater for the rapid growth in the organic and industrial load in Kuching, Sarawak. The commencement date of the proposed project was supposed to be December 2023, with completion in 23 months.

Pestech shares closed down 0.5 sen or 2.08% at 23.5 sen on Friday, giving it a market capitalisation of RM233.17 million. Its share price has fallen 28.79% so far this year.