The North Drive subcontract on the SMART project in Kuala Lumpur is in the throes of being terminated, each side claiming to have served notice first. Design-build consortium Gamuda-MMC cited under-performance by subcontractor Wayss & Freytag and failure on its part to comply with contractual work progress as the cause for terminating the contract.
An official statement from Royal BAM Group, of The Netherlands, parent company of Wayss & Freytag, confirmed its intention to terminate the contract, while a spokesperson in Kuala Lumpur told T&TI that Wayss & Freytag had served notice first and alleged late- and non-payment of funds in a list of grievances.
Operation of a 13.28m diameter Herrenknecht Mixshield by Wayss & Freytag, to complete the 5.2km long North TBM Drive of the 9.7km long dual flood-control/double-deck highway tunnel, was reported to be up to nine months behind schedule by early January 2006.
Gamuda-MMC confirmed that: “On 6 January 2006 we served a two-week notice of intention to terminate the subcontract and will have to take over completion of the North Drive as well as completing our South Drive.” Wayss & Freytag declined to comment further when T&TI made contact, but it is expected that the impasse will become the subject of lengthy legal contest in the Malaysian courts. Royal BAM confirmed that the North Drive subcontract was signed in early 2003 for a value of US$102M.
Wayss & Freytag was engaged to launch and manage progress of the first of the project’s two Mixshields. The Gamuda-MMC team was to follow the example of the experienced German tunnelling contractor to operate the second machine and complete the 4.1km South Drive in the opposite direction from the central working shaft for both TBMs.
Following launch of the machine in May 2004, the North Drive had completed 2,425m to early January 2006. The South Drive started three months later in August 2005 and had completed 3,250m to the same date. By early 2006 the South Drive was slightly ahead of schedule and about 800m from its programmed breakthrough in March 2006. The longer North Drive was well behind its 1 May 2006 scheduled breakthrough.
As a result of the contractual development, the Gamuda-MMC JV stated that there would be no suspension of work on the South Drive and that progress of the North Drive would resume at the earliest by end of March 2006, following the transition and the regrouping of the workforce and site operations. “We would like to retain the experienced local workers on the North Drive and will manage both drives from the central site office.” Royal BAM stated that “the Group does not anticipate any overall effect on Group forecasting,” as a result of developments in Kuala Lumpur.
Royal BAM acquired Wayss & Freytag at the end of 2002 when it acquired the Dutch construction company HBG, which had bought Wayss & Freytag some years earlier. The Royal BAM spokeperson told T&TI that the annual turnover of Wayss & Freytag is some US$245M and that termination of the contract in Malaysia would “absolutely not” threaten the existence of Wayss & Freytag or the parent company’s support of its wholly-owned subsidiary.
Construction by Gamuda-MMC of the concrete decks in the central 3km toll road facility of the large diameter segmentally lined tunnel was progressing towards a finish in March 2006. With M&E works also progressing, the toll road element is on track to be completed by the end of December.
