TRC’s management ‘misunderstood’ termination of contract

PETALING JAYA: TRC Synergy yesterday explained that its announcement of a contract termination by MRT2 Line project delivery partner MMC Gamuda KVMRT Sdn Bhd came seven months late, because of its management’s “misunderstanding”.

TRC only announced the termination of its RM74.4 million contract which was done on May 20, on Nov 28.

In a filing with the stock exchange yesterday, the company said management had thought the termination was due to a default in contract by TRC. It later found that it was a prerogative of Mass Rapid Transit Corporation Sdn Bhd, the MRT 2 Line owner, to do so and that it would also be entitled to compensation.

Management had also opined that the contract value of RM74 million for the job was not too significant when compared to its total contract order book of RM2.6 billion and would not have a material impact on the earnings per share and net asset value of the company.

However, the company’s board of directors in its meeting on Nov 28, agreed to announce the termination after due deliberation and consideration.

TRC has initiated a series of negotiations and discussions with MMC Gamuda to ascertain the quantum of damages and cost incurred and other consequences to the termination.

Due diligence exercise had also been undertaken by MMC Gamuda.

TRC Synergy shares dropped 2 sen or 4.82% to close at 39.5 sen yesterday.