KUALA LUMPUR (March 21):  Sarawak Consolidated Industries Bhd (KL:SCIB) has terminated its RM30.75 million engineering, procurement, construction and commissioning contract with Ennova Sdn Bhd due to non-payment for completed works.

In a bourse filing on Friday, SCIB said the notice was issued after Ennova failed to settle an outstanding amount of RM195,617 despite repeated reminders.

The company added that it had commenced legal proceedings against Ennova.

According to SCIB, Ennova had acknowledged the completion of all works under the project’s work order as of Sept 5, 2023. SCIB subsequently submitted its first progress claim on Oct 6, 2023, which was due for payment by Jan 4, 2024. However, Ennova did not fulfil its payment obligations, constituting a breach of contract, said SCIB.

"The company is enforcing its rights under the contract and taking necessary measures to protect SCIB’s interests in mitigating the risks arising from potential project delays due to long outstanding debts owing by Ennova," SCIB said in the filing.

The contract, awarded to its unit SCIB Properties Sdn Bhd in June 2022, involved providing project engineering services for the Kuala Lumpur City Hall's integrated smart lamp pole replacement within the Klang Valley. The project entailed the installation of 200 units of smart monopoles and was slated for completion by May 2023.

SCIB said the contract termination will not have any material impact on its gearing, earnings and net assets for the financial year ending June 30, 2025, as the amount owed by Ennova had already been impaired in the previous financial year.

Shares of SCIB closed unchanged at 19 sen on Friday for a market capitalisation of RM132.9 million.

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