Introduction

Pursuant to a Letter of Acceptance dated 9 July 2015, HSS Integrated Sdn Bhd (“HSSI”), an associate of HEB, was appointed by Mass Rapid Transit Corporation Sdn Bhd (“Client”) as the Consultant to provide Independent Consultant Engineer Services for Projek Mass Rapid Transit Laluan 2: Sungai Buloh-Serdang-Putrajaya (“Contract”).

The Contract, with a contract value of RM188,291,577, commenced on 10 April 2015 and expected to complete within the first quarter of 2022.  

The Government’s decision to reduce the cost of Projek Mass Rapid Transit Laluan 2: Sungai Buloh-Serdang-Putrajaya (“Project”) by converting the Project Delivery Partner Contract to Turnkey Contract has resulted in the Client revising the scope of the Independent Consultant Engineer Services for the Project.

HEB wishes to announce that HSSI has on 10 May 2019 accepted the amended terms of the Contract pursuant to the Client’s letter dated 8 May 2019.

Information on the Amended Terms of the Contract

In line with the revised scope of the Independent Consultant Engineer Services for the Project, the value of the Contract has been revised to RM158,684,623. The reduction of RM29,606,954 comprises of:-

(a)  RM21,946,713 of professional fees payable to HSSI;

(b)  RM4,038,823 of professional fees payable to Jabatan Kerja Raya’s professional employees seconded to HSSI for the Project; and

(c)  RM3,621,418 of reimbursable expenses.

The secondment of Jabatan Kerja Raya’s professional employees is on the basis that the Client only reimburses HSSI the actual professional fees and reimbursable expenses paid to the said professional employees.

Pursuant to the exclusive teaming arrangement between HSSI and HSS Engineering Sdn Bhd (“HSSE”), a wholly-owned subsidiary of HEB, HSSI and HSSE will continue to collaborate exclusively to execute and complete the Contract. 

Financial Effects

The revised Contract is expected to continue to contribute positively to the revenue, earnings and net assets of HEB Group for financial years ending 31 December 2019 to 31 December 2022.  

The Contract will not have any impact on the share capital and/or shareholding structure of HEB.

Directors’ and/or major shareholders’ interests

None of the Directors and/ or Major Shareholders of HEB and persons connected to them has any interest, direct or indirect, in the Contract.

Risk Factors

The Board of Directors does not envisage any specific risk to be associated with the amendments of the Contract.

Directors’ Statement

The Board of Directors, after considering all the relevant factors, is of the opinion that the acceptance of the Contract is in the best interest of HEB Group.

This announcement is dated 10 May 2019.