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Bloomberg
Malaysia is in discussions with China-based contractors for compensation relating to pipeline projects worth 9.4 billion ringgit ($2.24 billion).
The government is negotiating with China Petroleum Pipeline Engineering Co and Huanqiu Project Management Beijing Co on the total compensation to be paid by Suria Strategic Energy Resources Sdn, which was overseeing the projects, for the termination of the work, the finance ministry said.
Payments were made to contractors based on timeline progress, rather than the amount of work done, the statement said. “The Attorney General’s Chambers is heading the negotiation on behalf of the government and will be recommending to the government the next steps to take,†Finance Minister Lim Guan Eng said.
The talks will also include the amount to be reimbursed to SSER for compensation for work yet to be carried out. SSER had paid 8.3 billion ringgit, or 88 percent of the contract value, when only 13 percent of the work has been “purportedly done on two pipeline projects,†the finance ministry said. The works done so far have yet to be audited and verified, it said.
Malaysia undertook a sweeping review of public projects after a change in government.