SCIB's RM162m civil servants housing project in Perak falls through after developer fails to meet condition

• Following the lapse of the SA, SCIB said Awana must acknowledge a total indebtedness of RM19.72 million to SCIBP.

KUALA LUMPUR (Jan 14): Sarawak Consolidated Industries Bhd (KL:SCIB) announced that the RM162 million contract to build civil servants housing project in Perak that it secured from Awana JV Suria Saga Sdn Bhd as part of a debt settlement has fallen through after the developer failed to fulfil a key condition precedent within the stipulated time frame.

The condition, as stipulated under a settlement cum appointment of contractor agreement (SA) signed between the parties in April 2024, was for a nominee from SCIB be appointed to Awana’s board of directors within the conditional period.  

“Despite numerous reminders and demands, Awana failed to fulfil the condition precedent," SCIB said in a bourse filing on Monday. Hence, the SA has lapsed. Hence, the implementation of the contract for the project has also lapsed, it said.

The contract, which was awarded to SCIB's wholly owned subsidiary, SCIB Properties Sdn Bhd (SCIBP), was initially part of the SA after both parties had mutually agreed to scrap an EPCC (engineering, procurement, construction and commissioning) contract back in July 2023. SCIB was also made the corporate guarantor in favour of MBSB Bank Bhd for loan facilities granted to Awana to complete the project.

In return, Awana was required to appoint SCIBP as the exclusive main contractor for the project, known as “Program Perumahan Penjawat Awam” (PPAM Mualim). Awana also agreed to repay SCIBP an outstanding amount of RM19.13 million, which included a debt balance of RM18.64 million and an additional RM492,432.72 that were advanced on behalf of Awana by SCIB Industrialised Building System Sdn Bhd. 

Following the lapse of the SA, SCIB said Awana must acknowledge a total indebtedness of RM19.72 million to SCIBP. The debt is also now subject to impairment review, the company noted.  

“The company is seeking legal advice in relation to the recovery of the outstanding amount owed by Awana and the discharge of the corporate guarantor with MBSB. After discussions with our lawyer and a preliminary assessment of Awana’s financial position, management believes there is a strong possibility of recovering the amount owed by Awana. The company would provide a status update on the settlement in a separate announcement,” SCIB added.  

Awana, involved in construction, general trading, and investment holding, initially owned SCIBP RM18.72 million after the termination of the previous contract. A first payment of RM75,000 was made in August 2023.  

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