Tuesday, April 2, 2013

stop work order on TRC

TRC Synergy Bhd is the contractor undertaking the LRT extension at that site. Prasarana Negara Bhd has since issued a stop work order on TRC's portion.

Aside from potential delays in revenue recognition, TRC could potentially suffer from lawsuits, loss of reputation and termination by Prasarana. The LRT extension makes up 36% of TRC's orderbook.

TRC is currently (March 2013) meeting up with Prasarana to explain the situation and will bear full responsibility for the incident. Risk of termination by Prasarana is slim as there is no such provision clause in its contract and it will be costly and time consuming for Prasarana to retender the job out.

To recap, the accident occurred when construction equipment hoisted by a crane fell and crushed two cars at the Kelana LRT line extension site along KM15 Jalan Lapangan Terbang Subang. The first driver unfortunately died from the accident while the second driver survived but suffered serious injuries.

TRC was currently (March 2013) meeting up with Prasarana and the Works Safety Department to explain the situation. It also guided that the suspension by Prasarana only applies to that particular stretch of the extension, namely along Jalan Lapangan Terbang Subang.

At this juncture (early April 2013), management is unable to provide concrete guidance on how long the suspension will last. Works on the non-affected stretches (ie Subang and Summit USJ) will continue.

This could result from extended suspension of works along the affected stretch and review and implementation of tighter safety measures for the job.

The job was awarded to TRC in December 2010 and was 28.4% complete as of end 2012. The LRT line extension makes up 35.8% of TRC's RM1.9bil orderbook balance.

Reduction in its 2013 earnings is expected.

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