PBA Holdings subsidiary pursues over RM400mil in dual lawsuits over pipeline damage and reservoir construction

Penang Water Supply Corporation (PBAPP), a wholly-owned subsidiary of PBA Holdings Bhd, is engaged in two separate legal actions totaling over RM405 million. The claims target three firms for pipeline damage and a contractor for a reservoir construction breach. PBAPP filed a suit on May 13 against Impian Mawar Sdn Bhd, seeking RM400 million in damages, along with daily liquidated damages of RM3,000.

The dispute arises from Impian Mawar's failure to complete reservoir work and alleged negligence. PBAPP granted Impian Mawar 93 months to complete the project, but it was only 69% finished by August 2020. Impian Mawar now countersues for RM68 million, alleging wrongful termination and seeking declarations, damages, and repayment of a RM4.45 million royalty.

PBAPP's defense against the counterclaim was filed on August 20. Separately, PBAPP filed a lawsuit on March 3 demanding RM5.2 million for a damaged pipeline near the Jalan Permatang Pauh bridge, caused by horizontal directional drilling and electrical cable installation. The defendants include project co-developers Excel Focus Properties Sdn Bhd and Golden Village Properties Sdn Bhd, along with independent contractor Viewplex (M) Sdn Bhd.

The lawsuit alleges damage to a 1,200mm mild steel water pipeline during the works, leading to water losses and disruptions. The legal proceedings include cross-claims among the defendants. PBAPP maintains a reasonable chance of success in the lawsuit, pending trial evidence and judicial evaluation. Following a pre-trial compliance session, the case is adjourned to November 16, allowing parties to update the court on mediation outcomes.

As of September 22, no judgment has been rendered. PBAPP notes that pending litigation cannot definitively impact the group's financial status but reassures that the legal battles are not expected to disrupt day-to-day operations.